bampsl securities limited · the companies act, 1956 or any statutory modifications or re-enactment...

LETTER OF OFFER Dated: June 16, 2011

For Equity Shareholders of our company only

BAMPSL SECURITIES LIMITED(Incorporated on 3rd February, 1995 under the Companies Act, 1956 as BAMPSL Securities Limited in National Capital Territory of Delhi and Haryana and received

Certificate for Commencement of Business on 20th February, 1995 issued by Assistant Registrar of Companies –National Capital Territory of Delhi and Haryana)Registered Office: 100-A, Cycle Market, Jhandewalan Extension, New Delhi – 110 055, India (For details of change in Registered Office of our company, refer to

the section titled “History and Corporate Structure” starting on page no. 37 of this Letter of Offer) Tel No: + 91-11-2355 6436 Fax No: + 91-11-2361 7013 E-mail: [email protected]; Web site: www.bampslsecurities.com

Contact Person: Ms.Khyati Bansal, Company Secretary and Compliance OfficerPromoter of the Company: Mr. Bhisham Kumar Gupta

LETTER OF OFFER

ISSUE OF 20,59,88,160 EQUITY SHARES OF RS.1/- EACH FOR CASH AT PAR FOR AN AMOUNT AGGREGATING TO RS. 2,059.88 LACS ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 2 EQUITY SHARES FOR EVERY 1 FULLY PAID EQUITY SHARE HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, I.E. ON APRIL 20, 2011. THE ISSUE PRICE IS EQUAL TO THE FACE VALUE OF THE EQUITY SHARE.

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, investors must rely on their own examination of the issuer and the offer including the risks involved. The Securities being offered in the issue have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the statement of ‘Risk Factors’ given on page No. 7 under the Section ‘General Risks’.

ISSUER'S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect..

LISTING

The existing Equity Shares of our Company are listed on Bombay Stock Exchange Limited, Delhi Stock Exchange Limited and Jaipur Stock Exchange Limited. Our Company has received in-principle approval from Bombay Stock Exchange Limited for listing the securities arising from this Issue by its letter dated September 3, 2010. We are not required to obtain in-principle approval from other stock exchanges in terms of Regulation 7 (b) (iii) of SEBI (ICDR) Regulations, 2009. For the purpose of this Issue, the Designated Stock Exchange is Bombay Stock Exchange Limited.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

ARIHANT capital markets ltd.SEBI Registration No: INM000011070 3rd Floor, Krishna Bhavan, 67, Nehru Road, Vile Parle (East), Mumbai- 400 057 Tel No: +91- 22- 4225 4800/847; Fax No: +91- 22- 4225 4880; Email: [email protected] Website: www.arihantcapital.com Contact Person: Mr. Amol Kshirsagar

Alankit Assignments Limited SEBI Registration No.: INR000002532 2E/21, Jhandewalan Extension, New Delhi–110 055. Tel. No: +91-11- 4254 1234/2354 1234; Fax No.+91-11- 4254 1967 Email: [email protected] : www.alankit.com Contact Person: Mr. J. K. Singla

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON

JUNE 29, 2011 JULY 6, 2011 JULY 13, 2011

TABLE OF CONTENTS

SECTION PAGE NO. Section I - General Definitions and Abbreviations 1 Overseas Shareholders 5 Presentation of Financial Information And Use Of Market Data 5 Forward Looking Statements 6 Section II – Risk Factors 7 Section III - Introduction Summary 13 Summary of the Issue 14 Summary of Financial Information 16 General Information 18 Capital Structure 21 Section IV - Objects Of The Issue 25 Statement Of General Tax Benefits 29 Key Industrial Regulations And Policies- 36 Section V – About Our Company History And Corporate Structure 37 Management 41 Management Organisation Structure 43 Section VI – Financial Information Auditors’ Report on Financial Statements 44 Stock Market Data For Equity Shares Of Our Company 59 Section VII – Legal And Other Information Outstanding Litigations And Material Developments 60 Government And Other Approvals 61 Other Regulatory And Statutory Disclosures 62 Section VIII – Issue Related Information Terms of The Present Issue 71 Issue Procedure 75 Restrictions On Foreign Ownership Of Indian Securities 94 Section IX – Statutory And Other Information Material contracts and documents for inspection 95 Declaration 96

BAMPSL SECURITIES LIMITED

1

SECTION I – GENERAL

DEFINITIONS AND ABBREVIATIONS

In this Letter of Offer, the terms "we", "us", "our", "our Company" "the Company" or "BAMPSL", unless the context otherwise implies, refer to BAMPSL SECURITIES LIMITED. All references to "Rs." or "INR" refer to Rupees, the lawful currency of India, "USD" or "US$" refer to the United States Dollar, the lawful currency of the United States of America, references to the singular also refers to the plural and one gender also refers to any other gender, wherever applicable, and the words "Lakh" or "Lac" means "100 thousand" and the word "million" or "mn" means "10 lakh" and the word "crore" means "10 million" or "100 lakhs" and the word "billion" means "1,000 million" or "100 crores". Any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off.

Conventional / General Terms Term Description

Act or Companies Act

The Companies Act, 1956 or any statutory modifications or re-enactment thereof from time to time.

Depository

A depository registered with SEBI under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 as amended from time to time.

Depositories NSDL and CDSL. Depositories Act The Depositories Act, 1996 and subsequent amendments thereto. Depository Participant / DP

A depository participant as defined under the Depositories Act, 1996 and registered with SEBI under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 as amended from time to time.

DP ID Depository Participant’s Identity. FII(s) Foreign Institutional Investors registered with SEBI under applicable laws. FCNR Account Foreign Currency Non-Resident (Banks) Accounts as defined under Foreign

Exchange Management (Deposit) Regulations, 2000, as amended from time to time.

Indian GAAP Generally Accepted Accounting Principles in India. I.T. Act The Income Tax Act, 1961 and subsequent amendments thereto. Person or Persons

Any individual, sole proprietorship, unincorporated association, unincorporated organization, body corporate, corporation, company, partnership, limited liability company, limited liability partnership, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires.

Non Residents A person resident outside India, as defined under FEMA. NRE Account Non Resident External Account as defined under Foreign Exchange

Management (Deposit) Regulations, 2000, as amended from time to time. NRO Account Non Resident Ordinary Account as defined under Foreign Exchange

Management (Deposit) Regulations, 2000, as amended from time to time. RBI Reserve Bank of India SEBI Securities and Exchange Board of India SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and amendments thereto. SEBI (ICDR) Regulations

Securities And Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009, notified by SEBI on 26th August, 2009, as amended from time to time.

Securities Act United States Securities Act, 1933, and subsequent amendments thereto. Takeover Code/ SEBI (SAST) Regulations, 1997

The Securities and Exchange Board Of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended from time to time.

Wealth tax Act The Wealth Tax Act, 1957 and subsequent amendments thereto.


2

Company / Issue Related Terms

Term Description Articles / Articles of Association / AOA

Articles of Association of our Company.

Allotment Unless the context otherwise requires, the issue and the allotment of Equity Shares, pursuant to the Issue.

Allottee The applicants to whom the Equity Shares are being / have been allotted. Auditors Refers to M/s. G.C. Agarwal & Associates., unless otherwise specified. Bankers to the Issue Indusind Bank Ltd and Karnataka Bank Ltd Board or Board of Directors

Board of Directors of Our Company or a Committee(s) thereof.

Capital or Share Capital

Share Capital of our Company comprising of subscribed and paid up Equity Share Capital.

Equity Share(s) or Share(s)

Equity Share of our Company having a face value of Re. 1/- each listed on BSE, DSE and JSE unless otherwise specified in the context thereof.

Designated Stock Exchange

Bombay Stock Exchange Limited.

Draft Letter of Offer

This Draft Letter of Offer dated August 6, 2010 filed with SEBI.

Equity Shareholders

Unless otherwise stated, means a holder of Equity Shares of our Company as on the Record Date , i.e., April 20, 2011

Fiscal/FY Period of twelve months ended March 31 of that particular year, unless otherwise stated.

Investor(s) The holder(s) of Equity Shares of our Company as on the Record Date, i.e., April 20, 2011 and Renouncees.

Issue Closing Date July 13, 2011. Issue Opening Date June 29, 2011. Issue Price Re. 1/- Offer Document Draft Letter of Offer / Letter of Offer. Letter of Offer Letter of Offer circulated to the Shareholders of Our Company. Lead Manager or Lead Manager to the Issue

Lead Manager to this Issue, in this case being Arihant Capital Markets Limited.

Listing Agreement Listing Agreement entered into with BSE, DSE and JSE by our company. Memorandum or Memorandum of Association/ MoA

Memorandum of Association of our Company.

Promoter Bhisham Kumar Gupta. Record Date April 20, 2011. Registrar to the Issue or Registrar

Alankit Assignments Limited.

Registrar and Transfer Agent

Alankit Assignment Limited.

Registered Office The Registered office of our company situated at 100-A, Cycle Market, Jhandewalan Extension, New Delhi – 110 055.

Renouncees Shall mean the persons who have acquired Right Entitlements from the existing Equity Shareholders of our Company.

Right Entitlement

The number of Equity Shares(Two) that a shareholder is entitled to in proportion to his/her shareholding (One) in our Company i.e. “Two shares for Every One Share held “as on the Record Date.

Rights Issue The issue of equity shares being offered on rights basis as per terms of this offer document.


3

The Offer or The Issue

Issue of 20,59,88,160 (Twenty Crores Fifty Nine Lacs Eighty Eight Thousand One Hundred Sixty) fully paid equity shares with a face value of Re.1/- each at par for an amount aggregating to `2,059.88 lacs on rights basis to the existing shareholders of our company in the ratio of 2 fully paid equity share for every 1 equity share held by the existing shareholders on the record date, i.e. on April 20, 2011.

Industry Related Terms

Term Description

CAGR Compounded Annual Growth Rate. IC Investment Company. LAS Loan Against Shares. NBFC

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares /stock /bonds /debentures/securities issued by Government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale /purchase / construction of immovable property. In terms of Section 45-IA of the RBI Act, 1934, it is mandatory that every NBFC should be registered with RBI to commence or carry on any business of non-banking financial institution as defined in clause (1) of Section 45-IA of the RBI Act, 1934.

NOF Net Owned Fund. PLR Prime Lending Rate.

Abbreviation

Term Description

AGM Annual General Meeting. Arihant Arihant Capital Markets Limited. AS Accounting Standards, as issued by the Institute of Chartered Accountants of

India. ASBA Application Supported by Blocked Amount process provided by SEBI as one

of the modes for applying in a Public Issue / Rights Issue. BSE Bombay Stock Exchange Limited. BV Book Value. CAF Composite Application Form. CDSL Central Depository Services (India) Limited. DP Depository Participant. DSE Delhi Stock Exchange Ltd. ECS Electronic Clearing Service EGM Extra-ordinary General Meeting. EPS Earning Per Share. FDI Foreign direct investment FEMA Foreign Exchange Management Act, 1999 and subsequent amendments

thereto. FIPB Foreign Investment Promotion Board GDP Gross Domestic Product GoI Government of India. IFSC Indian Financial System Code ICAI The Institute of Chartered Accountants of India ICSI The Institute of Company Secretaries of India IPO Initial Public Offer JSE Jaipur Stock Exchange Ltd.


4

Ltd. Limited MICR Magnetic Ink Character Recognition MoU Memorandum of Understanding. NEFT National Electronic Funds Transfer NRI(s) Non Resident Indian(s). NSDL National Securities Depository Limited. OCB(s) Overseas Corporate Body(ies). P.A. Per Annum. PAN Permanent Account Number. RTGS Real Time Gross Settlement SAF Split Application Form SCSB Self Certified Syndicate Banks.


5

OVERSEAS SHAREHOLDERS The distribution of this Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Letter of Offer may come are required to inform themselves about and observe such restrictions. Our company is making this issue of Equity Shares on a rights basis to the shareholders of our company and will dispatch the Letter of Offer/Abridged Letter of Offer and Composite Application Form (“CAF”) to such shareholders who have an Indian address. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that this Letter of Offer has been filed with SEBI for observations. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and this Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, in those circumstances, this Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer should not, in connection with the issue of the Equity Shares or the rights entitlements, distribute or send the same in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the rights entitlements referred to in this Letter of Offer. Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our company’s affairs from the date hereof or that the information contained herein is correct as at any time subsequent to this date. PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial information used in this offer document is derived from our company's financial statements as of fiscal 2010, prepared in accordance with Indian GAAP and the Companies Act, 1956, as stated in the report of our statutory auditors M/s G.C. Agarwal & Associates., included in this Letter of Offer. Unless stated otherwise, throughout this Letter of Offer, all figures have been expressed in Lakhs, except in the section titled "Capital Structure” and “Stock Market Data for Equity shares of our Company” on Page No. 21 and Page No. 59 respectively of this offer document where certain figures have been expressed in absolute numbers or in Lakhs. All numbers presented in this offer document have been rounded off to two decimal places. Our fiscal year commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, reference herein to a fiscal year (e.g. fiscal 2010), is to the fiscal year ended March 31 of a particular year. All references to "Rupees" or "Rs" are to Indian Rupees, the official currency of the Republic of India. In this Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed may be due to rounding off.


6

FORWARD LOOKING STATEMENTS

We have included statements in this Letter of Offer which may contain words or phrases such as "will", "aim", "is likely to result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will pursue" and similar expressions or variations of such expressions, that are "forward looking statements". All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include but are not limited to:

General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;

Changes in laws and regulations relating to the sectors/areas in which we operate;

Increased competition in the sectors/areas in which we operate;

Our ability to successfully implement our business plans, for which funds are being

raised through this Issue;

Fluctuations in operating costs;

Our ability to attract and retain qualified personnel;

Changes in political and social conditions in India, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

The performance of the financial markets in India and globally; For a further discussion of factors that could cause our actual results to differ, see the chapter titled "Risk Factors" beginning on Page No. 7 of this Letter of Offer r. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated.


7

SECTION II – RISK FACTORS

RISK FACTORS An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Letter of Offer, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks actually occur, our business, results of operations and financial condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment. The financial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. Internal Risk Factors

1. We do not have a fixed investment plan to utilize a substantial portion of the issue proceeds amounting to ` 1600 lacs which is 77.67% of the Issue size One of the objects of this issue is to raise funds that will enable our company to, inter alia, invest ` 1600 lacs in shares and securities, both in the primary and the secondary markets. These investments shall be made depending upon the market conditions prevailing at that time. The management, in the best interest of the company, may defer the investments or change the instruments of investments or if the market situation does not seem to be conducive for a profitable deployment of funds, may altogether utilise the issue proceeds for such other uses, which in its absolute discretion is the most profitable deployment of funds at that point of time.

2. We have not entered into any definitive agreements to utilize significant portion of the issue proceeds amounting to `425 lacs which is 20.63% of the Issue size Our objects of this issue include, interalia, acquisition of certain fixed assets, i.e., Office premises, office infrastructure such as Computers & other peripherals, other office equipments. However, since our company has not entered into any agreement with any vendor for the aforesaid acquisitions, there can be no assurance that we will be able to conclude definitive agreements on terms anticipated by us.

3. The objects of the Issue for which funds are being raised have not been appraised by any

bank or financial institution. The deployment of funds as stated in the “Objects of the Issue” beginning on Page No. 25 of this Letter of Offer is entirely at our discretion and is not subject to monitoring by any independent agency. All the figures included under the “Objects of the Issue” are based on our own estimates. There has been no independent appraisal of the project. We have not entered into any definitive agreements to utilize a substantial portion of the Issue.

4. Our loans and advances are unsecured. While we have been very selective and conservative in our lending policies and are generally satisfying ourselves with credit worthiness and repayment capacities of our borrowers, our loans and advances are unsecured in nature, and there can be no assurance that we will be able to timely recover the interest and / or principal on loans advanced by us. In such an eventuality, there could be an adverse impact on our business, our future financial performance and consequently on the price of our Equity Shares. Details of unsecured loans & advances outstanding during the last 3 financial years

Amt. (` In Lacs) Financial year

Outstanding as at the year end

Instances of non-recovery of loans and advances

Amt. Period of delay

Resulting bad debts (Amt.)

2007-08 492.62 3.01 8 months 3.01 2008-09 605.27 6.63 10 months 6.63 2009-10 534.27 8.06 11 months 8.06


8

5. We are in the business of providing loans to individuals and businesses. Any deterioration in the quality of our borrowers in terms of financial worth, will adversely affect our ability to recover our loans and interest on time and such delays will adversely affect our ability to do further business. Further, any default in repayment by our borrowers, will result in losses to our company by way of provisioning for/ write off of bad debts. As our loans are unsecured, any deterioration in the quality of our borrowers in terms of their financial worth, may expose us to difficulties in timely recovery of interest and principal amount from such borrowers. In the event of such deterioration in our Company’s asset portfolio, there could be an adverse impact on our business, our future financial performance and consequently on the price of our Equity Shares.

6. Our business is vulnerable to interest rate risk and volatility in interest rates which could adversely affect our income from our operations and adversely affect our financial performance and profitability. Interest Income is one of the sources of income of our Company. During the year ended March 31, 2010, the Company has earned interest income of `35.51 lacs and it constituted about 76% of the total income. Sharp and sustained increases in the rates of interest charged on various loans in our Company’s loan portfolio, would result in extension of loan maturities due from borrowers and higher rates of default. This could have a material adverse effect on our Company’s results of operations and financial condition. In addition, potential customers may be deterred from entering into any financing arrangements in an increasing interest rate scenario. Interest rate risk and volatility in interest rates are inherent in the field of finance and investments. The interest rate cycle is an economic phenomenon and our Company tries to factor the expected volatility in interest rate risk while assessing the credit worthiness and repayment capacities of prospective borrowers. The interest income and its percentage of total income for the last 3 financial years are :

F.Y. Interest Income % to total Income 2007-08 ` 34.92 Lacs 16.57 2008-09 ` 29.25.Lacs 93.92 2009-10 ` 35.51 Lacs 76.03

Although there have been no instances in the history of the company where interest rate vulnerability has caused any adverse effects, there can be assurance about the occurrence or otherwise of the same in future

7. Investment of net issue proceeds in various investment instruments, as detailed in our Objects of Issue, may not give returns as anticipated and the investments may suffer losses. Substantial portion of net proceeds of the issue are proposed to be invested in Equity Markets, Debt Markets, Mutual Funds and other financial instruments. These investments by their nature, carry a risk of partial or complete loss of capital due to systemic risk inherent in the financial markets and the un-systemic risk of issuer of these instruments. Despite due care taken by the management, in selection of instruments, quantum of investment and timing of the investments our company may not get returns on investments as expected and may also suffer partial or complete loss of invested capital. The financial impact of such an event cannot be anticipated at this point of time.

8. We have not been consistent in earning favourable returns from our investment and securities trading business. We are engaged in the business of investment and trading in securities. The trading and profitability are directly linked to activities, investor interest and direction of indices in the capital market. We had reported revenues from these activities of ` 75.66 lacs, ` (46.15) lacs, `1.24 lacs and ` 11.12 lacs for the FY 2007, 2008, 2009 and 2010 respectively Despite our efforts to earn favourable returns on our capital employed, we have not been successful to consistently achieve the same as the financial markets are volatile by nature and there may be


9

certain phases of extreme uncertainty and volatility, which have been witnessed on several occasions in the past in the Global Capital Markets i.e in the year 2008

9. We have negative cash flows in financial year 2009 & 2010. For the FY 2009, we had net negative cash flows to the tune of `(57.75) lacs and for FY 2010, the cash flows were ` (2.46 lacs). Negative cash flow during FY 2009, is on account of deployment of cash in Loans and Advances to the tune of ` 112.05 lacs against ` 54.30 lacs being cash generated from operations and balance was met from then available opening cash balance of ` 88.12 lacs. As regards FY 2010, our company generated ` 23.71 lacs as Cash from operating activities as against deployment towards purchase of fixed assets of ` 21.18 and ` 4.99 lacs incurred as ROC charges. A continued negative cash flow position may adversely affect our business operations.

10. The profit of our company for the financial year ended 2007 and 2008 was higher on account of profit from sale of land and was not from ordinary business activities of our company.

Our Company had sold land for ` 712.70 lacs (FY 2007) and ` 251.05 lacs (FY 2008) and earned profits of `684.20 lacs and ` 221.95 lacs in FY 2007 and 2008 respectively on the transactions. These revenues are of non-recurring nature. The Total Income and Profitability of our company for the Fiscal 2007 and 2008 are correspondingly higher on account of sale proceeds of land and the resulting profit.

11. The success of our business is substantially dependent on our promoter Mr. Bhisham Kumar Gupta; and his disassociation from our company for any reason could adversely affect our business.

We are dependent on the experience and continued efforts of our promoter Mr. Bhisham Kumar Gupta. In the event of his disassociation from our company for any reason or in the event of his getting incapacitated to remain actively involved with the company in managing its affairs, our ability to maintain and grow our revenues would be adversely impacted. Financial impact of the aforesaid risk cannot be reasonably quantified.

12. Non ownership of premises of the registered office.

As on the date of this LOF, our Company operates from the premises owned by Mr. Hemant kumar Gupta, one of the relatives of our promoter, located at 100-A, Cycle Market, Jhandewalan Extension, New Delhi – 110 055. A no objection letter has been given by Mr. Hemant kumar Gupta to our company for using the said premises as the registered office; Further, any adverse impact on the title/ownership rights of our owner, from whose premises we operate our registered office or breach of the contractual terms or non renewal of the operational business agreement may impede our Company’s operations.

13. Our Promoters will not hold majority of our Equity Shares and it can lead to the possibility of hostile takeover of our Company / change in management. After the completion of this Issue, our Promoter and Promoter group will not hold majority of company’s Equity Shares. Consequently, there are chances of substantial acquisition of our company’s shares through hostile takeover by an outsider. Currently the shareholding of promoter group is 7.30% of the paid up capital which will remain the same after this issue if all the shareholders subscribe to their entitlements in full.

14. Our Promoters will not hold majority of our Equity Shares after the Issue and may not therefore determine the outcome of Shareholders voting Our Promoters will not be able to exercise a significant degree of influence over our company and may not be able to control the outcome of any proposal that requires approval by majority of Shareholders’ vote.


10

15. We are subject to uncertainties associated with the securities industry and to fluctuating

revenues. As a financial services company, we are subject to uncertainties that are common in the securities industry. These include the volatility of domestic and international financial bond and stock markets; extensive governmental regulation; litigation; intense competition; substantial fluctuations in the volume and price level of securities; and dependence on the solvency of various third parties. As a result, our revenues and earnings may vary significantly from quarter to quarter and from year to year. In periods of low trading volume, profitability is impaired because certain expenses remain relatively fixed. We are much smaller and have much less capital than many other players in the securities industry and our revenues are likely to decline in such circumstances. If we are unable to correspondingly reduce our expenses, our profit margins would erode.

16. Any future issuance of Equity Shares by our company may affect the market price of our Equity Shares. Any future issuance of Equity Shares by our company may dilute the holdings of investors in our Equity Shares, which may, in turn, affect the market price of our Equity Shares.

17. Renunciation by any shareholder in favour of a non-resident or FII will require prior

approval of the RBI and/or FIPB subject to certain terms and conditions. Renunciation of rights entitlement in our Company by any shareholder in favour of a non-resident or a FII will require prior approval of the RBI and/or FIPB subject to certain terms and conditions. There can be no certainty as to the conditions subject to which the approval will be granted or if the approval will be granted at all. For more details on the restrictions applicable to non residents or FIIs please refer to the section titled "Terms of the Present Issue" beginning on Page No. 71 of this Letter of Offer.

18. Future sale of Equity Shares by some of our current shareholders could affect the price of our Equity Shares in the secondary market. The sale of our Equity Shares by any major shareholders could adversely affect trading price of our Equity Shares and could impact our ability to raise capital through an offering of our securities. In addition, any perceptions by investors that such an issuance or sale might occur, could also affect the trading price of our Equity Shares.

19. One of the business interests of our promoter is in the capacity of sub-broker which is

related to that of our Company’s business and this could lead to a situation of potential conflict of interest. Our Promoter Mr. Bhisham Kumar Gupta is registered as a sub broker of Adroit Financial Services Private Limited for BSE and NSE Exchanges. As on the date of filing of Letter of Offer, our company is not routing its trading transactions through the aforesaid sub broker. In the event of our company doing so in future a situation of potential conflict of interest may arise, unless the transactions are entered on arms length basis at prevailing market rates.

20. Reliance/Concentration on few scrips may have adverse impact on our profit As a part of our business, our investment / trading activities may have concentration in few scrips at a given point of time on which we may be having a positive outlook. Despite our efforts to enter into such transactions after understanding of the business prospects of the investee company, there is potential risk of reliance /concentration on few scrips by us and any factor adversely affecting such companies may have an adverse impact on the profits of our Company.


11

EXTERNAL RISK FACTORS

1. A slowdown in economic growth in India could cause our business to suffer Our performance quality and growth of our assets are necessarily dependent on the health of overall Indian Economy. A slowdown in the Indian Economy could adversely affect our business, including our ability to grow our asset portfolio, the quality of our assets and our ability to implement our strategy. Indian Economy can be adversely affected by a general rise in interest rates, weather conditions adversely affecting agriculture, deterioration of infrastructure or various other factors affecting the growth of industrial, manufacturing and service sector. In addition, the Indian Economy is in a state of transition. The Share of the service sector of the Economy is increasing while that of the industrial, manufacturing and agricultural sectors is declining. It is difficult to gauge the impact of these fundamental economic changes on our business.

2. Stability of policies and political situation in India can determine the fortunes of the industry. A significant change in India's economic liberalisation and deregulation policies could affect business and economic conditions in India generally and our business in particular. A significant change in the Indian government's or the state governments’ economic liberalisation and deregulation policies could adversely affect business and economic conditions in India generally and our business and financial condition and prospects in particular.

3. Financial difficulties and other problems in certain Financial Institutions in India could

cause our business to suffer and the price of our Equity Shares to go down. We are exposed to the risks of the Indian Financial System, which in turn, may be affected by financial difficulties and other problems faced by certain Indian Financial Institutions. Certain Indian Financial Institutions have experienced difficulties during recent years. Some Co-operative Banks (which tend to operate in rural sector) have also faced various financial and liquidity crisis. There has been a trend towards consolidation of weaker banks and NBFCs being merged with stronger entities. The problems faced by individual Indian Financial Institutions and any instability in or difficulties faced by the Indian Financial System generally could create adverse market perception about Indian Financial Institutions, banks and NBFCs. This, in turn, could adversely affect our business, our future financial performance, our shareholders funds and the market price of our Equity Shares.

4. Terrorist attacks, civil unrest and other acts of violence or war involving India and

other countries could adversely affect the financial markets and our business Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which our Equity Shares will be traded and may also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence. India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on us. Such incidents could also create a greater perception that investment in Indian Companies involves a higher degree of risk and could have an adverse impact on our business and the market price of our Equity Shares.

5. Natural calamities could have a negative impact on the Indian economy and cause our

business to suffer. India has experienced natural calamities such as earthquakes, tsunami, floods and drought in the past. The extent and severity of these natural disasters determines their impact on the Indian economy. For example, in the past, as a result of drought conditions in the country, the agriculture sector has recorded a negative growth. Such or other natural calamities could have a negative impact on the Indian economy, adversely affecting our business also.


12

6. Material changes in the regulations NBFCs in India are subject to supervision and regulation by RBI. Stock markets and capital markets are regulated by SEBI. In addition we are subject to changes in Indian corporate Laws as well as to the changes in the government regulations and policies and accounting principles. Any changes in the regulatory frame work affecting NBFCs or the securities market including stock markets may adversely affect the profitability of our business and our financial performance.

7. Any downgrading of India’s debt rating by an International Rating Agency could have a negative impact on our business. Any adverse revisions to India’s credit ratings for domestic and international debt by International Rating Agencies may adversely impact our ability to raise additional financing, the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on our business, our financial performance, our ability to raise financing for onward lending and the price of our Equity Shares. Prominent Notes:

Net worth of the Company as on December 31, 2010 as per Audited Financial Statements is ` 1443.78 lacs.

The size of the issue (equity shares component on fully paid basis) is ` 2,059.88 lacs.

There are no Related Party Transaction entered into by our company with any related party during one year preceding the date of filing

Our promoter group, the directors of our company who are promoters, our other

directors and their relatives have not financed the purchase by any other person of securities of our company other than in the normal course of the business of any financing entity during the period of six months immediately preceding the date of filing this Letter of Offer with the Board.


13

SECTION III – INTRODUCTION

SUMMARY

This is only a summary and does not contain all the information that you should consider before investing in our Equity Shares. You should read the entire Letter of Offer, including the information contained in the chapters titled “Risk Factors” and “Auditors’ Report on Financial Statements” and related notes beginning on Page No. 7 and 44 of this Letter of Offer before deciding to invest in our Equity Shares.

SUMMARY OF OUR BUSINESS: Our Company was incorporated as BAMPSL Securities Limited (BAMPSL) on February 3, 1995. We received Certificate for Commencement of Business on February 20, 1995. Our company was originally promoted by Mr. Bhisham Kumar Gupta, Mr. Naresh Chand Khandelwal, Mr. Hemant Kumar Gupta, Mr. Jolly Gupta and Ms. Sheela Gupta. However, currently only Mr. Bhisham Kumar Gupta is the promoter of our company. Our Company, on inception, was engaged in the business of investing funds in the primary capital market. We started the operations in securities trading in 1995. Presently we are engaged in the business of investments in shares and other securities. We operate in the cash market segment in BSE and capital market segment and Futures & Options segment in NSE. We are also engaged in securities jobbing, hedging and investment activities. Our company is registered as a non-deposit taking NBFC with RBI, and is also engaged in making of loans and investments. Our trading and investment activities are handled by Chief Dealer- Capital Markets under the guidance of our Managing Director Mr. Bhisham Kumar Gupta who has experience of over 22 years in securities market. Our company did its maiden public issue in February 1996 and got its shares listed at the Bombay Stock Exchange Ltd. (then The Stock Exchange, Mumbai), Jaipur Stock Exchange Limited, and Delhi Stock Exchange Limited. Our company had made an application dated July 7, 1997 to the RBI, New Delhi, for obtaining Certificate of Registration for carrying on the business of Non Banking Financial Institution, for which our company obtained a Certificate No. 14.00856 dated May 25, 1998. Our company is registered as a non deposit accepting NBFC. We confirm that the activities undertaken / proposed to be undertaken by us are in conformity with the applicable provisions stipulated by various Regulatory Authorities


14

SUMMARY OF THE ISSUE Dear Shareholder(s), Pursuant to the resolution passed by the Board of Directors of our Company at its meeting held on March 2, 2010 and April 16, 2010 it has been decided to make the following offer to the Equity Shareholders of our Company, with a right to renounce: ISSUE OF 20,59,88,160 (TWENTY CRORES FIFTY NINE LACS EIGHTY EIGHT THOUSAND ONE HUNDRED SIXTY) EQUITY SHARES OF FACE VALUE OF RE.1/- EACH FOR CASH AT PAR FOR AN AMOUNT AGGREGATING TO RS. 2,059.88 LACS ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 2 EQUITY SHARES FOR EVERY 1 FULLY PAID UP EQUITY SHARE HELD BY A SHAREHOLDER ON THE RECORD DATE, I.E. ON APRIL 20, 2011. IMPORTANT This offer is applicable only to those Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the Depositories in respect of the shares held in the electronic form and on the Register of Members of our Company in respect of the shares held in physical form as on April 20, 2011, i.e. Record Date, to be fixed in consultation with Stock Exchanges. Your attention is drawn to the section titled "Risk Factors" beginning on Page No. 7 of this Letter of Offer. Please ensure that you have received the CAF with this Letter of Offer. Please read this Letter of Offer and the instructions contained herein and in the CAF carefully, before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer/ Abridged Letter of Offer and must be carefully followed. Applications are liable to be rejected if they are not in conformity with the terms of the Letter of Offer/Abridged Letter of Offer or the CAF. All enquiries in connection with this Letter of Offer/Abridged Letter of Offer or CAF should be addressed to the Registrars to the Issue, Alankit Assignments Limited, quoting the Registered Folio Number/Depository Participant (DP) Number and Client ID Number and the CAF Numbers as mentioned in the CAF. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a duplicate CAF on the request of the shareholder who should furnish the registered folio number/DP ID/client ID number and his/her full name and address to the Registrar. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received / found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. The offer will be kept open for a minimum period of fifteen (15) days. If extended, it will be kept open for a maximum period of thirty (30) days.


15

The Issue Program is as follows: Issue Opens on June 29, 2011 Last date for request for split application forms July 6, 2011

Issue Closes on July 13, 2011 The funds received against the offer will be kept in separate bank account(s) and our Company can utilise the funds collected in the issue only after the finalisation of basis of allotment. If our Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants not later than fifteen (15) days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. fifteen days after closure of the issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Act. THE ISSUE Equity Shares proposed to be issued by our company

20,59,88,160 Equity Shares

Rights Entitlement Two Equity Shares for every One Fully Paid up Equity Share held on the Record Date (2 for 1)

Record Date April 20, 2011 Issue Price per Equity Share Re. 1/- Equity Shares outstanding prior to the Issue 1,029,94,080 Equity Shares outstanding after the Issue 30,89,82,240 Terms of the Issue For more information, refer to Section titled

“Terms of The Present Issue" beginning on page no. 71 of this Letter of Offer.


16

SUMMARY OF FINANCIAL INFORMATION Profit & Loss Account for the year ended (Amt. in ` Lacs)

We are engaged in the business of investment and trading in securities. The trading and profitability are directly linked to activities, investor interest and direction of indices in the capital market. We have not been successful to consistently earn favourable returns on their capital employed as the financial markets are volatile by nature and there may be certain phases of extreme uncertainty and volatility, which have been witnessed on several occasions in the past in the Global Capital Markets i.e in the year 2008. The Capital Market activities have picked up only recently after a lull period witnessed after 2008. We have reported revenues of `. 75.66 lacs, ` (46.15) lacs, ` 1.24 lacs and `. 11.12 lacs for the FY 2007, 2008, 2009 and 2010 respectively

PARTICULARS SCHD. 31.12.2010 31.03.2010

AMOUNT(`) AMOUNT(`)

INCOME

Income from Operations 9 19.68 11.12 Other Income 10 43.05 35.58 62.73 46.70 EXPENDITURE Salaries & Benefits 11 4.98 5.09 Administrative expenses 12 15.78 19.99 Financial Charges 13 0.07 0.03 Depreciation 3 2.94 2.31 Preliminary Expenses Written off 8 2.42 3.22 26.18 30.65 Profit before Tax 36.55 16.06 Less: Current Tax Less: Provision for Income Tax 6.80 4.96 Add: Provision for Deferred Tax 0.43 (0.32) Profit after tax 29.32 11.41 Less: Transfer to Statutory Reserve as per sec. 45-IC of RBI Act, 1934

5.86 2.28

Profit & Loss transferred to Balance Sheet 23.45 9.13 NOTES TO THE ACCOUNTS 14


17

Balance Sheet As At

PARTICULARS SCHD. 31.12.2010 31.3.2010 AMOUNT( `) AMOUNT( `) SOURCES OF FUNDS : Share Capital 1 1,029.94 1,029.94 Reserves & Surplus 2 428.00 398.68 Deferred Tax Liability 1.20 0.78 1,459.14 1,429.40 APPLICATION OF FUNDS Fixed Assets Gross Block 3 47.59 47.59 Less : Depreciation 16.68 13.74 Net Block 30.91 33.85 CURRENT ASSETS, LOANS & ADVANCES

CURRENT ASSETS Sundry Debtors, Loans and Advances 4 1,294.02 1,179.77 Closing Stock 9 143.44 185.84 Other Current Assets 6 10.90 11.17 Cash & Bank Balance 5 1.11 20.80 1,449.47 1,397.58 LESS: CURRENT LIABILITIES & PROVISIONS

7 35.40 12.70

1,414.07 1,384.88 MISC. EXPENDITURE (To the extent not written off or adjusted)

8 14.16 10.67

1459.14 1429.40 Significant Accounting Policies and Notes to Accounts

14


18

GENERAL INFORMATION

Our Company Name of our company BAMPSL Securities Limited Registered Office 100-A, Cycle Market, Jhandewalan Extension,

New Delhi – 110 055, India. Contact Details Tel. No. + 91-11- 2355 6436

Fax No. + 91-11- 2361 7013 [email protected] www.bampslsecurities.com

Registration Number (Corporate Identity No.)

L74899DL1995PLC065028

Address of Registrar of Companies

Registrar of Companies – Delhi, 4th Floor, IFCI Tower, 61, Nehru Place, New Delhi – 110 019

Board of Directors of our Company

Sr. No.

Name Designation

1. Mr. Bhisham Kumar Gupta Chairman and Managing Director 2. Mr. Suresh Kumar Singhal Executive Director 3. Mr. Sandeep Kumar Khandelwal Non Executive Independent Director 4. Mr. Jitendra Mahajan Non Executive Independent Director

Company Secretary & Compliance Officer

Name of the Compliance Officer

Ms. Khyati Bansal Company Secretary

Address 100-A, Cycle Market, Jhandewalan Extension, New Delhi-110 055.

Telephone No. + 91-11- 2355 6436 Fax No. + 91-11- 2361 7013 E-mail [email protected]

Lead Manager to the Issue Name: Arihant Capital Markets Limited SEBI Registration No. INM 000011070 Address 3rd Floor, Krishna Bhavan, 67, Nehru Road,

Vile Parle (East), Mumbai- 400 057 Telephone No. +91- 22- 4225 4800 Fax No, +91- 22- 4225 4880 E-mail [email protected] Website www.arihantcapital.com Contact Person Mr. Amol Kshirsagar

Registrars to the Issue Name Alankit Assignments Limited SEBI Registration No. INR 000002532 Address 2E/21, Jhandewalan Extension, New Delhi–110055. Telephone No +91-11- 42541234, 23541234 Fax No +91-11- 42541967 E mail: [email protected] Website www.alankit.com Contact Person Mr. J. K. Singla


19

Registrar and Transfer Agents for our company Name Alankit Assignments Limited SEBI Registration No. INR 000002532 Address 2E/21, Jhandewalan Extension, New Delhi–110055. Telephone No +91-11- 42541234, 23541234 Fax No +91-11- 42541967 E mail: [email protected] Website www.alankit.com Contact Person Mr. J. K. Singla

Auditors of our company Name G.C. Agarwal & Associates , Chartered Accountants Address 240, Ghalib Apartments, Parwana Road, Pitampura,

Delhi-110034 Telephone No +91-11- 27010306 E-mail [email protected]

Principal Bankers to our company Name Punjab National Bank Address West Patel Nagar, Main Road, New Delhi-110008 Telephone No. +91-11 2588 3876, 2588 6648 Fax No. +91-11 2588 3970 Website: www.pnbindia.com

Name Karnataka Bank Limited Address Savita Vihar, NewDelhi-110092 Telephone No. +91-11 2882 2214 Fax No. +91-11 2882 2213 Website: www.karnatakabank.com

Bankers to the Issue Name IndusInd Bank Ltd SEBI Registration No. INBI00000002 Address IndusInd Bank Ltd, Cash Management Services , Soltaire

Corpoarte Park, No.1001, Building no. 10, Ground Floor, Guru Hargovindji Marg, Andheri East, Mumbai – 400 093

Telephone No. +91-22-67723901 Fax No. +91-22-67723998 E-mail: [email protected] Website: www. indusind.com Contact Person: Mr. Prasanna.Vaidyanathan

Name Karnataka Bank Limited SEBI Registration No. INBI00000060 Address Karnataka Bank , P.B.No.59, Mahaveera Circle, Kankanady,

Mangalore - 675 002 Telephone No. +91-11-28822214 Fax No. +91-11 2882 2213 E-mail: [email protected] Website: www.karnatakabank.com Contact Person: Mr. Umesh .T


20

Note: Investors are advised to contact the Registrars to the Issue/Compliance Officer in case of any pre-issue / post-issue related problems such as non-receipt of Letter of Offer / Letter of Allotment / Share Certificate(s) / Refund Orders / Demat Credit. Inter-se Allocation of Responsibilities Arihant Capital Markets Limited is the sole Lead Manager to the Rights Issue and all the issue related activities are co-ordinated by them. Credit Rating Details & IPO grading This being an issue of Equity Shares on a rights basis, no credit rating & IPO grading is required. Self Certified Syndicate Banks The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on www.sebi.gov.in/pmd/scsb.pdf.” Debenture Trustees This being a Rights Issue of Equity Shares, appointment of Trustees is not required. Monitoring Agency In terms of regulation 16 of SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009, since the issue size will not be exceeding ` 500 Crores, No Monitoring Agency has been appointed. Appraising Entity The objects of the issue for which the funds are being raised have not been appraised by any bank or financial institutions. Underwriting Details Our Company has not entered into any standby arrangements with underwriters for underwriting the present issue. Expert Opinion Save and except as stated in the chapter titled “Auditors Report on Financial Information” and chapter titled “Statement of General Tax Benefits” beginning on page no. 44 and page no. 29 respectively of this Letter of Offer, Our Company has not obtained any expert opinions in relation to this Letter of Offer. Principal Terms of Loan and Assets Charged as Security Our company has not availed of any secured loans and none of the assets of the company are charged as security for any loan.


21

CAPITAL STRUCTURE

Particulars Amount (` in Lacs)

3,100.00

Authorised Share Capital 31,00,00,000 Equity Shares of Re 1/- each

3,100.00

1,029.94 Issued, Subscribed & Paid-up Share Capital 10,29,94,080 Equity Shares of Re 1/- each fully paid- up

1,029.94

2,059.88

Present issue being offered to the existing Shareholders through the Letter of Offer 20,59,88,160 Equity Shares of Re. 1/ each, at Re. 1/- each for cash

2,059.88 Paid-up Capital after the issue 30,89,82,240 Equity Shares of Re. 1/- each fully paid-up

3,089.82

Nil Nil

Securities Premium Account Existing Securities Premium Account On Allotment of Proposed Rights Issue

Total After the Proposed Rights Issue

Nil

• As the present issue is being made at par, the nominal value of capital being raised and

capital raised at the issue price is same. • There are no outstanding convertible securities issued by our company. • The issue price has been arrived at, in consultation between our company and the Lead

Manager. Notes to the Capital Structure:

i. No further issue of capital whether by way of preferential allotment, rights issue or in any other manner will be made by our Company during the period commencing from submission of the Letter of Offer with SEBI till the Securities referred to in this Letter of Offer have been listed, or application money is refunded in the event of failure of the issue.

ii. Our Company presently does not have any intention or proposal to alter its capital structure within a period of six months from the date of opening the issue, by way of split/consolidation of the denominations of Shares or further issue of Shares whether preferential or otherwise.

iii. Our Company has not issued any options which are outstanding as on the date of Letter of Offer.


22

iv. The Shareholding pattern of our company as on March 31, 2011 is as follows:

Category of Shareholder

No. of Shareholders

Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of total No.

of Shares

Shares pledged or otherwise encumbered

As a % of

(A+B)

As a % of (A+B+C)

Number of shares

As a % of Total

No. of Shares (A) Shareholding of Promoter and Promoter Group

(1) Indian Individuals / Hindu Undivided Family

1 3,798,282 3,798,282 3.69 3.69 - -

Directors/Promoters & their Relatives & Friends

12 3,712,962 3,483,593 3.61 3.61 - -

Sub Total 13 7,511,244 7,281,875 7.29 7.29 - - (2) Foreign Total shareholding of Promoter and Promoter Group (A)

13 7,511,244 7,281,875 7.29 7.29 - -

(B) Public Shareholding

(1) Institutions (2) Non-Institutions Bodies Corporate 143 27,320,101 27,320,101 26.53 26.53 - - Individuals - - Individual shareholders holding nominal share capital up to ` 1 lakh

6,280 26,475,173 24,480,755 25.71 25.71 - -

Individual shareholders holding nominal share capital in excess of ` 1 lakh

59 30,856,726 29,745,455 29.96 29.96 - -

Any Others (Specify) 207 10,830,836 10,830,836 10.52 10.52 - - Clearing Members 28 1,384,667 1,384,667 1.34 1.34 - - Hindu Undivided Families

103 8,434,989 8,434,989 8.19 8.19 - -

Non Resident Indians 34 134,045 134,045 0.13 0.13 - - Margin Account 42 877,135 877,135 0.85 0.85 - - Sub Total 6,689 95,482,836 92,377,147 92.71 92.71 - - Total Public shareholding (B)

6,689 95,482,836 92,377,147 92.71 92.71 - -

Total (A)+(B) 6,702 102,994,080 99,659,022 100.00 100.00 - - (C) Shares held by Custodians and against which Depository Receipts have been issued

- - - - - - -

(1) Promoter and Promoter Group

- - - - - - -

(2) Public - - - - - - - Sub Total - - - - - - - Total (A)+(B)+(C) 6,702 102,994,080 99,659,022 - 100.00 - -

Note: The categorization of shareholders under the category ‘clearing members’ and ‘Margin

Account’ is as per depository norms. Shares under the two categories represent shares whose registered owners are stock brokers and the shares therein are held either as clearing members or as margin for client trades by respective brokers


23

v. Details of Promoter’s contribution and Lock - in for Promoter and Promoter Group The present issue being a rights issue, provisions of promoter’s contribution and lock-in, are not applicable as per the extant SEBI (ICDR) Regulations. None of the existing shares of the promoters and promoter group are under lock-in, pledged or encumbered.

vi. Details of shareholding of persons forming part of Promoter and Promoter Group

Total Shares held Shares pledged or otherwise

encumbered Sl. No.

Name of the Shareholder

Number As a % of grand total (A)+(B)+(C)

Number % of Total shares held

As a % of grand total (A)+(B)+(C)

1 Bhisham Kumar Gupta

3,798,282 3.69 - - -

2 Suresh Kumar Singhal

19,600 0.02 - - -

3 Hemant Kumar Khandelwal

1,960 0.00 - - -

4 Subhash Chand

490,000 0.48 - - -

5 Vipin Khandelwal

210,000 0.20 - - -

6 Saurabh Khandelwal

266,000 0.26 - - -

7 Chandrika Khandelwal

66,640 0.06 - - -

8 Naresh Chand Khandelwal

143,276 0.14 - - -

9 Pulkit Khandelwal

222,818 0.22 - - -

10 Satish Chand Khandelwal

758,080 0.74 - - -

11 R B Gupta 813,289 0.79 - - - 12 Sandeep

Kumar Khandelwal

4,900 0.00 - - -

13 Navneet Kumar

716,399 0.70 - - -

Total 7,511,244 7.29 - - -

vii. The list of shareholders holding more than 1% of the paid-up capital of our company as on March 31, 2011

Sl. No.

Name of the Shareholder No. of Shares

Shares as % of Total No. of Shares

1 Hari Ram Chaudhary 2,032,520 1.97 2 Abhishek Tyagi 1,710,549 1.66 3 Kaushlya Garg 4,900,000 4.76 4 Shri Krishan Dats 2,877,400 2.79 5 Kanika Khandelwal 2,050,000 1.99 6 Ramdas Kshirsagar 1,841,086 1.79 Total 15,411,555 14.96


24

viii. Our Promoter and Promoter Group have not traded in the shares of our Company in last one year

ix. The promoters / promoter group have undertaken to subscribe to their entitlement and /or renounce in favour of entities / persons whose shareholding will be classified under promoter group; as well as apply for such number of additional shares beyond their entitlement, collectively, in the event the issue is undersubscribed, so as to ensure full subscription to the issue. This acquisition of additional Equity Shares, if allotted to the promoter / promoter group shall be in terms of proviso to regulation 3 (1) (b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1) (b)(ii) of the Takeover Code. Further, such acquisition of additional shares will not result in change of control of management of our Company. The promoter / promoter group have undertaken to subscribe to the equity shares over and above their entitlement. Assuming that the entire rights issue of 20,59,88,160 Equity Shares is subscribed to by and allotted to our promoters, their shareholding in our company will increase to 69.10% whereby our company will continue to be in compliance with Clause 40A of the Listing Agreement, and public shareholding will continue to be well above the minimum permissible level.

x. Our company, promoters, directors and lead manager have not entered into any buyback or standby arrangements for any of the securities being issued through this Letter of Offer.

xi. At any given point of time there shall be only one denomination for the Shares of our

Company and we shall comply with such disclosure and accounting norms as may be prescribed by SEBI.

xii. Our company has not issued any warrant, option, convertible loan, debenture or any other

securities convertible at a later date into equity, which would entitle the holders thereof to acquire further Equity Shares of our company.


25

SECTION IV

OBJECTS OF THE ISSUE

Our Company intends to use the proceeds of the present Issue for the following purposes:

1. Expansion of investment activities and securities trading business 2. Investment in the office infrastructure 3. Meet Issue expenses 4. General Corporate Purposes

The main object clause and the object incidental or ancillary to the main object clause of our Memorandum of Association enable us to undertake our existing activities and the activities for which the funds are being raised by us in the Issue. Requirement of funds (` in Lacs)

Sr. No. Objects of the Issue Requirement

1. Expansion of investment activities and securities trading business 1600.00

2. Investment in the office infrastructure 425.00 3. Meet Issue expenses 30.00 4. General Corporate Purposes 4.88 TOTAL 2,059.88

The details of our fund requirements and deployment of such funds are based on internal management estimates in view of the current circumstances of our business and are subject to change in light of variation in external circumstances, changes in market trends, change in government policy and other external factors of operations, business or strategy. Our management, in response to the change in nature of the market, will have the discretion to revise our business plan from time to time and consequently our funding requirements and deployment of funds may also change. This may entail rescheduling or revising the proposed utilization of the Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of the Net Proceeds. The objects of the Issue broadly allocates proposed investment of funds amongst different avenues as per the current plan of our management based on their assessment of the prevailing market situation, with a proviso that the management may revise its business plan from time to time in response to changes in the market scenario. The financial markets are volatile by nature and there may be certain phases of extreme uncertainty and volatility, which have been witnessed on several occasions in the past in the Indian Capital Markets. In such cases, our management, in the best interest of our Company, may defer the Investments or change the instrument of investment or deploy the funds in such other avenues which may be altogether different than as are proposed herein. 1. Expansion of investment activities and securities trading business The objects of the issue are to raise capital for developing and expanding our business into various investment segments. The net proceeds from this Issue will be used to expand the existing activities of the company and to acquire infrastructure which will enable and support this expansion plan. The company wants to take the benefit of growing economy of India and high growth in the financial sector of the economy. The proceeds from the issue after deducting the Issue related expenses are referred to as “Net Proceeds from the issue”.


26

Our company’s main business activities include (i) Securities Trading (ii) Providing Loans and (iii) Making Investments. Considering the expected buoyant growth in financial markets, Our Company is planning a major expansion in its operations. We intend to invest the net proceeds of the Issue in various investment avenues currently available in the market. Our requirement of funds for expansion of trading activities and securities trading business is as detailed below:

(Amt. in ` lacs)

Activities Requirement FY 2011-12 A. Investment in Government Securities Government Securities (Including State Government Securities)

200.00 200.00

Total (A) 200.00 200.00 B. Investment in Mutual Funds Equity Funds-Diversified 100.00 Monthly Income Plans 100.00 Equity Funds- Pure Midcap Fund 100.00 Balance Funds 100.00 Income Funds 100.00 Income Funds- Institutional 100.00 Gilt Funds- (Short & Long Term) 100.00 Floating Rate Income Funds 100.00 Total (B) 800.00 800.00 C. Securities Trading Trading in securities (including investment in Public Issues) 600.00 600.00 Total (C) 600.00 600.00 Total (A + B + C) 1600.00 1600.00 Note: Our Company does not intend to acquire or takeover or increase its shareholding in any

target company in a manner that may trigger the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

2. Investment in the office infrastructure

(Amt. in ` lacs) Activities Requirement FY 2011-12

A. Purchase of Office Premises Purchase of office in New Delhi, (Approximate Area 2000 Square Feet)

380.00 380.00

Total (A) 380.00 380.00 B. Purchase of Other Office Infrastructure Computers and peripherals 10.00 Air Conditioners 5.00 Furniture & Fixture 25.00 Other Office Equipments 5.00 45.00 Total (B)

45.00 45.00

Total (A + B ) 425.00 425.00


27

Note: The proposed deployment of issue proceeds on office infrastructure is as per the

prevailing market prices, as ascertained by the management of our Company. The present market value of commercial premises in the areas in New Delhi where we intend to purchase office premises is estimated to be around ` 19,000/- per sq. ft and accordingly, an amount of ` 380 lacs is estimated towards purchase of Office Premises. We have also incurred an expenditure of ` 21.18 lacs on purchase of furniture & fixtures, computers and other office equipments in the FY 2009-10. The expenditure on these items of office infrastructure which are of recent nature, have also been used as reference point or basis for estimating proposed expenditure on items of office infrastructure to be financed from the proceeds of this Rights Issue.

3. Meet Issue expenses Issue expenses The expenses for this Issue include issue management fees, printing and distribution expenses, legal fees, advertisement expenses, depository charges and listing fees to the Stock Exchanges, among others. The total expenses for this Issue are estimated not to exceed `30 Lacs. A broad breakup of the same is as under: (Amt. in ` lacs)

4. General Corporate Purposes Our company is proposing to use the funds for general corporate purposes including business promotion and marketing, access to financial database of corporate etc. While no specific plan is yet made by our company in this regard, indicative details are as under: (Amt. in ` lacs)

Means of Finance (Amt. in ` lacs) Present Rights Issue 2,059.88 Total 2,059.88 The entire objects of the issue are proposed to be financed by the proceeds of the Rights Issue. Appraisal The objects of the issue for which the funds are being raised are not appraised by any bank or financial institution.

Nature of Expenses Amount

Fees to the Merchant Banker, Registrar and Bankers 12.00 Printing & Stationery and Postage expenses 4.00 Advertisement 9.00 SEBI, Stock Exchange and other regulatory fees 5.00 Total 30.00

Nature of Expenses Amount

Business Promotion 2.00 Marketing and Advertisement 2.50 Miscellaneous 0.38 Total 4.88


28

Schedule of Implementation

(Amt. in ` lacs)

Sr. No. Activity

Funds Already

Deployed

To be deployed

in FY 2011-12

Total

1. Expansion of investment activities and securities trading business

1600.00 1600.00

2. Investment in the office infrastructure 425.00 425.00 3. Issue expenses 5.00 45.00 50.00 4. General Corporate Purposes 4.88 4.88 TOTAL 5.00 2,054.88 2059.88

Deployment of Funds and Source of Financing of Funds already deployed Our company has incurred an expenditure of ` 5.00 lacs towards the objects of the proposed issue up to the date of filing this Letter of Offer (Amt. in ` lacs)

Activity Amount Sources of funds Issues Expenses 5.00 Internal resources

Deployment of Balance Funds The balance funds are proposed to be deployed in FY 2011-12. Interim Use of Proceeds Pending any use as described above, we intend to invest the proceeds of this Issue in high quality, interest/dividend bearing short term/ long term liquid instruments including deposits with banks for the necessary duration. Strategic Partner / Financial Partner Our company does not have any strategic partner or financial partner in relation to the objects of the issue. There are no material existing or anticipated transactions in relation to the utilisation of issue proceeds with promoters, directors, key management personnel, associate and group companies. Our Company has not availed bridge loan or any other financial arrangement, which may be repaid from the proceeds of the issue. Special Tax Benefits No other tax benefits are available for our Company and our shareholders except the ‘General Tax Benefits’ available to all companies or to shareholders of any company, which are subject to fulfilling certain conditions as required under the respective Acts, as disclosed under chapter “Statement of General Tax Benefits” appearing on page no. 29


29

STATEMENT OF GENERAL TAX BENEFITS

CERTIFICATE FOR STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO OUR COMPANY AND ITS SHAREHOLDERS

The Board of Directors BAMPSL SECURITIES LTD, 100 – A, Cycle Market, Jhandewalan Extension, New Delhi – 110055 Dear Sirs, We hereby certify that the enclosed annexure states the possible tax benefits available to BAMPSL SECURITIES LIMITED (the “Company”) and to the Shareholders of the Company under the provisions of the Income Tax Act, 1961 (provisions of Finance Act, 2010), and other direct and indirect tax laws presently enforce in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its Shareholders to derive tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. A shareholder is advised to consider in his/her/its own case, the tax implications of an investment in the equity shares particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail. We do not express any opinion or provide any assurance as to whether: • The Company or its shareholders will continue to obtain these benefits in future; or • The Conditions prescribed for availing the benefits have been / would be met with. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. This report is intended solely for your information and for the inclusion in the offer document in connection with the proposed rights issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. Thanking you, For G.C. Agarwal & Associates Chartered Accountants Firm Regn. No. 017851N (G.C. Agarwal) Prop. M.No. 083820 Place: New Delhi Dated: 05-02-2011


30

TAX BENEFITS CERTIFICATE

The tax benefits listed below are the possible benefits available under the current tax laws in India. Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence the ability of the Company or its Shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives it faces in the future, it may not choose to fulfill. I. GENERAL TAX BENEFITS As per the existing provisions of the IT Act and other laws, as applicable for the time being in force, the following general tax benefits and deductions are and will, inter alia, be available to the Company and its prospective shareholders: A. BENEFITS AVAILABLE UNDER THE INCOME TAX ACT, 1961 (i) TO THE COMPANY: 1. Dividends exempt under Section 10(34) Dividend income (whether interim or final), in the hands of the company as distributed or paid by any other Company, on or after April 1, 2003 is completely exempt from tax in the hands of the Company, under section 10(34) of the IT Act. 2. Income from units of Mutual Funds exempt under Section 10(35) The Company will be eligible for exemption of income received from units of mutual funds specified under Section 10(23D) of the Act, income received in respect of units from the Administrator of specified undertaking and income received in respect of units from the specified company in accordance with and subject to the provisions of Section 10(35) of the Act. 3. Premium Paid on Health Insurance under Section 36(1)(ib) In terms of section 36(1)(ib) of the Act, with effect from April 1, 2007, the amount of any premium paid by cheque by the assessee as an employer to effect or to keep in force an insurance on the health of his employees under a scheme framed in this behalf by: a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 and approved by the Central Government; or is deductible expenditure and will accordingly apply in relation to the assessment year 2009-10 and subsequent years. 4. Exemption of Long-Term Capital Gain under Section 10(38) According to section 10(38) of the Act, long-term capital gains on sale of equity shares or units of an equity oriented fund where the transaction of sale is chargeable to Securities Transaction Tax (STT) shall be exempt from tax. However, the aforesaid income shall be taken into account in computing the Book profit and income tax payable under section 115JB. 5. Preliminary Expenses under Section 35D In accordance with and subject to the provisions of section 35D of the Income tax Act, the company will be entitled to amortize, over a period of five years, all expenditure in connection with the proposed rights issue subject to the overall limit specified in the said section.


31

6. Exemption of Long Term Capital Gain under Section 54EC According to the provisions of section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of ` 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. 7. Lower Tax Rate under Section 111A on Short-Term Capital Gains As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares or units of an equity oriented fund where the transaction of sale is chargeable to Securities Transaction tax (“STT”) shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education cess). 8. Lower Tax Rate under Section 112 on Long-Term Capital Gains As per the provisions of Section 112 of the Act, long-term gains that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess). 9. Set off and carried forward losses Loss arising from Business can be carried forward and set off against business profits in future for a period of eight years 10. Benefits under Section 115JAA Under Section 115JAA (1A) of the Act, tax credit shall be allowed of any tax paid (MAT) under Section 115JB of the Act. Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. Such MAT credit shall not be available for set-off beyond 10 years (w.e.f. 1-4-2010) succeeding the year in which the MAT becomes allowable. 11. Minimum Alternate Tax (MAT) under Section 115JB

Under Section 115JB of the Act, in case of a company, if the tax payable on the total income as computed under the normal provision of Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the April 1, 2001 is less than seven and one half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be seven and one-half per cent of such book profit. However, with effect from April 1, 2009 i.e., in relation to the Assessment Year 2009-10 and subsequent years, if the tax payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the April 1, 2009 is less than 15% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be ten per cent of such book profit.


32

(ii) BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS: 1. Exemption under Section 10(34) Dividend (whether interim or final) declared, distributed or paid by the Company is completely exempt from tax in the hands of the shareholders of the Company as per the provisions of section 10(34) of the IT Act. 2. Exemption of Long-Term Capital Gain under Section 10(38)

Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company or unit of an equity oriented mutual fund (i.e. capital asset held for the period of twelve months or more) entered into in a recognized stock exchange in India and being such a transaction, which is chargeable to Securities Transaction Tax, shall be exempt from tax. 3. Exemption of Long Term Capital Gain under Section 54EC According to the provisions of section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of ` 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. 4. Exemption of Long term Capital Gain under Section 54F According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset ((not covered by sections 10(38)) and not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. 5. Lower Tax Rate under Section 111A on Short-Term Capital Gains As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares where the transaction of sale is chargeable to Securities Transaction Tax shall be subject to tax at a rate of 15% plus applicable surcharge and education cess). 6. Lower Tax Rate under Section 112 on Long-Term Capital Gains As per the provisions of Section 112 of the Act, long term gains that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess).


33

7. Set off and carried forward Loss Under the Income Tax Act, Short term Capital Loss arising from transfer of shares shall be carried forward and set off against Short term and Long term capital gains for a period of Eight years. Similarly, Long term Capital Loss arising from transfer of shares shall be carried forward and set off against Long term capital gains for a period of Eight years.

(iii) BENEFITS AVAILABLE TO NON RESIDENTS/ NON-RESIDENT INDIAN SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE CAPITAL INVESTORS)

1. Exemption under Section 10(34) Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income tax in the hands of the shareholders. 2. Exemption under Section 10(38) Under Section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to Securities Transaction Tax. 3. Exemption of Long Term Capital Gain under Section 54EC According to the provisions of section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of `50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. 4. Exemption of Long Term Capital Gain under Section 54F According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset ((not covered by sections and 10(38)) and not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. 5. Lower Tax Rate under Section 111A on Short-Term Capital Gains Under section 111A of the Act and other relevant provisions of the Act, short-term capital gains (i.e., if shares are held for a period not exceeding 12 months) arising on transfer of equity share in the Company would be taxable at a rate of 15% (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax. Short-term capital gains arising from transfer of shares in a Company, other than those covered by section 111A of the Act, would be subject to tax as calculated under the normal provisions of the Act.


34

6. Set off and carried forward Loss Under the Income Tax Act, Short term Capital Loss arising from transfer of shares shall be carried forward and set off against Short term and Long term capital gains for a period of Eight years. Similarly, Long term Capital Loss arising from transfer of shares shall be carried forward and set off against Long term capital gains for a period of Eight years. 7. Lower Tax Rate under Section 112 on Long-Term Capital Gains

Under section 112 of the Act and other relevant provisions of the Act, long term capital gains, (other than those exempt under section 10(38) of the Act) arising on transfer of shares in the Company, would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess) after indexation. The amount of such tax should however be limited to 10% (plus applicable surcharge and education cess) without indexation, at the option of the shareholder, if the transfer is made after listing of shares. Where shares of the Company have been subscribed in convertible foreign exchange, Non- Resident Indians (i.e. an individual being a citizen of India or person of Indian origin who is not a resident) have the option of being governed by the provisions of Chapter XII-A of the Act, which inter alia entitles them to the following benefits: 8. Under section 115E, where the total income of a non-resident Indian includes any income from investment such income shall be taxed at a concessional rate of 20 per cent (plus applicable surcharge and education cess). Also, where shares in the company are subscribed for in convertible foreign exchange by a Non-Resident India, long-term capital gains arising to the nonresident Indian shall be taxed at a concessional rate of 10 percent (plus applicable surcharge and education cess). The benefit of indexation of cost and the protection against risk of foreign exchange fluctuation would not be available. 9. Under provisions of section 115F of the Act, long term capital gains (in cases not covered under section 10(38) of the Act) arising to a non-resident Indian from the transfer of shares of the Company subscribed to in convertible Foreign Exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets or in any savings certificates referred to in section 10(4B), within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition. 10. Under provisions of section 115G of the Act, it shall not be necessary for a Non- Resident Indian to furnish his return of income under section 139(1) if his income chargeable under the Act consists of only investment income or long term capital gains or both; arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from as per the provisions of Chapter XVII-B of the Act. 11. As per Section 90(2) of the Act, provisions of the Double Taxation Avoidance Agreement between India and the country of residence of the Non-Resident/ Non- Resident India would prevail over the provisions of the Act to the extent they are more beneficial to the Non-Resident/ Non-Resident India. (iv) BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIs’) 1. Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income tax in the hands of the shareholders. 2. Under Section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such


35

equity shares or unit is chargeable to Securities Transaction Tax. However, the aforesaid income shall be taken into account in computing the Book profit and income tax payable under section 115JB. 3. According to the provisions of section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of ` 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. 4. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to nay benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and

5. The stated benefits will be available only to the sole/first named holder in case the shares are held by joint shareholders.

6. In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of his/her participation in the issue.

Thanking you, For G.C. Agarwal & Associates Chartered Accountants Firm Regn. No. 017851N (G.C. Agarwal) Prop. M.No. 083820 Place: New Delhi Dated: 05-02-2011


36

KEY INDUSTRY REGULATIONS AND POLICIES

The proposed objects of the issue of our company are towards the existing line of business of our company. Hence, there are no new Key Industry Regulations applicable for the proposed objects of the issue.

INTEREST OF PROMOTERS AND DIRECTORS TO THE PROJECT OR OBJECT

OF THE ISSUE

There is no material existing or anticipated transactions in relation to Object of the Issue or utilisation of issue proceeds with promoters, directors, key managerial personnel, associates and group companies.


37

SECTION V – ABOUT OUR COMPANY

HISTORY & CORPORATE STRUCTURE

Our Company was incorporated as BAMPSL Securities Limited on February 3, 1995. It received a Certificate for Commencement of Business on February 20, 1995. Our Company was originally promoted by Mr. Bhisham Kumar Gupta, Mr. Naresh Chand Khandelwal, Mr. Hemant Kumar Gupta, Mr. Jolly Gupta and Ms. Sheela Gupta However, currently only Mr. Bhisham Kumar Gupta is the promoter of our Company. Our Company, on inception, was engaged in the business of investing funds in the primary capital market. We started the operations in securities trading in 1995. Presently we are engaged in the business of investments in shares and other securities. We operate in the cash market segment in BSE and capital market segment and Futures & Options segment in NSE. We are also engaged in securities jobbing, hedging and investment activities. Our company is registered as a non-deposit taking NBFC with RBI, and is also engaged in making of loans and investments. Our trading and investment activities are handled by Chief Dealer- Capital Markets under the guidance of our Managing Director Mr. Bhisham Kumar Gupta who has experience of over 22 years in securities market. Our company made an initial public offer in February 1996 and thereafter its shares were listed on the Bombay Stock Exchange Ltd, Jaipur Stock Exchange Ltd., and Delhi Stock Exchange Ltd. Our company made an application dated July 7, 1997 to the RBI, New Delhi, for obtaining Certificate of Registration for carrying on the business of Non Banking Financial Company. Accordingly, we were granted registration vide Certificate No. 14.00856 dated May 25, 1998 as a non-deposit accepting NBFC. For Financial Performance of our company, please refer to the section titled "Financial Information" beginning on Page No. 44 of this Letter of Offer. For further details on capital history please refer to the chapter titled "Capital Structure" beginning on Page no. 21 of this Letter of Offer. Major Events

Period Event 1995 Incorporation as a public limited company and starting of securities trading 1996 Made its maiden Public Issue of its shares 1997 Applied to RBI for registration as NBFC 1998 Received NBFC Registration from RBI 2007 Made a Bonus Issue of shares 2008 Made a Bonus Issue of shares


38

Main Objects of our Company The Main objects for which our Company is established, as set out in its Memorandum of Association inter-alia include:

1) To carry on the business of stock and share broking and in allied matters such as acting as underwriters, sub-underwriters, brokers to issue of securities, dealers in securities, buying, selling, transferring, hypothecating and holding of Shares, Debenture and Securities of all kinds and description, Merchant Banks for the purpose of issue of Shares/Debenture and securities of all kinds. Lead Managers or Co-Managers, Brokers and Sub-Brokers of Stock and new issue of Shares, Debenture and Securities of all kinds and description, Registrars to the issue of Securities, Shares Transfer Agents, and to do Investment Business, Portfolio Management, Corporate counselling, Investment Canvassing, Financial Consultants, (with the permission of RBI and other authorities) Advisors and Consultants to the issue of Securities of all kinds and types in all their aspects in India or outside and manage/arrange mergers and acquisitions.

2) To invest, acquire and hold, buy or sell or otherwise dispose of or deal in securities of

and kind, Shares, debentures, Debenture Stock, Securities, Properties, Bonds, Units, Obligations and Securities issued or guaranteed by any Government, State, Union Territory, Municipal or Civic Body, Financial Institution, Commercial Papers, Negotiable Instruments and Paper Instruments of all types and kinds.

3) To promote, establish and sponsor in any part of India of elsewhere the business of

insurance in every spare and field and to act as Corporate Life Insurance agents, general Insurance agents, surveyors, assessors, insurers and to carry on the business of insurers for industrial, commercial and residential properties, real estates, plantations, gardens, plant and machinery, motor vehicles of every kind and description, ocean going ships and vessels and other equipment’s and assets and to undertake insurance against any risks and calamities, including an act of God.

Our company has passed a special resolution under section 149(2A) of the Companies Act, 1956, at its Annual General Meeting held on July 15, 1995 for carrying on the following activities as laid in the sub clause 45 and 47 of Clause III (C) of the Memorandum of Association:

1) To carry on the business as financiers (not amounting to banking business within the meaning of Banking Regulations Act, 1949) by way of loaning, lending, and advancing money to industries, individuals, commercials and other enterprises.

2) To carry on the business of a leasing and hire purchase company and to acquire, to provide on lease or to be provided on hire purchase basis all types of industrial and offices plants equipments, machinery, vehicles, buildings and real estate, required for manufacturing, processing, transportation and trading business and other commercial and services business.

Our company has passed a special resolution at its Annual General Meeting held on September 20, 2004 for carrying on the following activities as laid in sub clause 21 of Clause III (C) of the Memorandum of Association,

(i) To carry on the business of farming, horticulture, floriculture, sericulture, dairies, cultivators, of all kinds of food grains, seeds, fruits, proprietors of orchards and traders, exporters, dealers, and sellers of the products of farming, dairy, horticulture, floriculture, sericulture and pisciculture and fishing and manufactures of drinks, alcoholic or otherwise, including beverages produced from such products or otherwise, to carry on the business of cultivators, growers, manufactures, millers, grinders, rollers, processors, cold stores, canners and preservers and dealers of food grain and such other


39

agricultural, dairy, horticultural and poultry products, fruits, vegetables, herbs, medicines, flowers, drinks, fluids, and other fresh and preservable products and to extract bye-products and derivatives whether edibles, pharmaceutical medicines or any such other kind or nature whatever and food preparations of every kind and description and generally the business or manufacture of and trading in preserved, dehydrated, canned or converted agricultural products, fruits and vegetables, foods, dairy and poultry products and articles and such other derivatives, of all kinds and description and to set up and run machinery for processing and preserving the same.

Our company has passed a special resolution at its Annual General Meeting held on September 30, 2006 for carrying on the following activities as laid in sub clause 48 of Clause III(C) of Memorandum of Association:

(i) To Build, Construct, establish, own, purchase, sell, take on lease or exchange or otherwise acquire, hold maintain and manage industrial, commercial, residential building, apartment house, hotels, motels, hostels, restaurants, factory premises godowns, golas, warehouses, flats, hostels, boarding houses, clubs, pleasure ground and amusement parks, theatres, cinemas or such other show houses, meeting or lecture hall, libraries, dharamshalas and sarais, health resorts and sanatoriums, gardens, swimming pools and baths, huts Bazar and markets, melas and exhibition and to let, sublet, give on lease or otherwise to permit use and occupation of the same for rent or hire charges and to provide for the tenants and occupiers thereof all or any of the conveniences commonly provided in residential, commercial and industrial quarters”.

Although we have passed a special resolution in AGM held on September 30, 2006 to enable our Company to carry on the real estate activities, no business activity in this regard is commenced by us. We presently do not have any intentions to enter into real estate sector. We have remained engaged in the business of investments in shares and other securities, and making of loans and investments. We are presently concentrating on our core area of business and the funds being raised in the proposed Rights Issue are also towards the present business activities. Our Company does not deal in arbitrage as part of its investment strategy. However, during certain periods, we employ strategies for hedging the trading and investment positions. Business Model We are registered with the Reserve Bank of India as a Non Deposit Accepting Non Banking Financial Company (NBFC). Our Company was incorporated in 1995 and on inception, we were engaged in the business of investing funds in the primary capital market.Our main line of Business is Investment in shares and other securities and trading in securities. We are also engaged in the business of providing loans and making Investments besides securities jobbing, hedging and investment activities. We operate in the Cash Market Segment in BSE and capital market segment and Futures and Options segment in NSE. Our company’s business model is centered around two main activities in the capital market and financial market i.e. investments and securities trading; and making of loans and investments. Being a RBI registered NBFC, we provide finance to our clients after satisfying ourselves about the credit worthiness and repayment capacity of our borrowers; however, the loans are unsecured in nature. Our promoter and managing director who heads the management of the Company has experience of over 20 years to oversee the activities of loans and advances. The trading and investment activities of Our Company are handled by Chief Dealer – Capital Markets under the guidance of our Managing Director who is well-experienced in securities market.


40

We are engaged in the business of investment and trading in securities. The trading and profitability are directly linked to activities, investor interest and direction of indices in the capital market. We have not been successful in consistently earning favourable returns on our capital employed as the financial markets are volatile by nature and there may be certain phases of extreme uncertainty and volatility, which have been witnessed on several occasions in the past in the Global Capital Markets i.e in the year 2008. The Capital Market activities have picked up only recently after a lull period witnessed after 2008. We have reported revenues of ` 75.66 lacs, ` (46.15) lacs, `1.24 lacs and ` 11.12 lacs for the FY 2007, 2008, 2009 and 2010 respectively Corporate Structure Our business activities are broadly managed under the following functional departments: Capital Markets and securities trading We conduct our business of investments in shares and other Securities under this department. We also engage in securities jobbing, hedging and investment activities, investment in primary market capital issues etc. The department conducts research to help maximize returns on our investments and also advises management on various investment strategies. The department is headed by Chief Dealer (Capital Markets). Finance, Accounts & Administration The department caters to

‐ Lending / advancing loan with or without collateral ‐ Financial accounting: financial and fixed asset reporting; payroll; accounts payable ‐ Accounting function: maintain the general and subsidiary ledgers; process and record all

revenues and prepare general purpose financial statements in compliance with Statutory Laws.

‐ Accounting oversight and guidance to other internal departments to ensure the legal requirements, policies and procedures

‐ General administration and human resources development, imparting requisite training as and when required, office maintenance etc.

The department is headed by Senior Manager (Accounts & Finance).

Legal and Statutory Compliances The compliances of various legal and secretarial related matters including Stock Exchange filings, filing under SEBI Takeover Regulations, ROC related compliances, tax payments, annual returns etc. are handled by this department under the supervision of Company Secretary & Compliance Officer. All the above departments work under the overall supervision of our Managing Director, Mr. Bhisham Kumar Gupta. Subsidiary Companies Our Company currently has no subsidiary. Also no company holds 51% or more of our Company.


41

MANAGEMENT Board of Directors Under our Company's Articles of Association, the number of Directors of our Company cannot be less than three or more than 12. At present there are 4 Directors. The Board of Directors comprises the following persons:

Sr. No.

Name, Father's name, Designation, Age, Address, Qualification & Occupation

Date of expiration of current term

Other Directorships

1. Mr. Bhisham Kumar Gupta 05.02.2014

Indo-Japan Agro-Tech Ltd

Father’s Name: Mr. Shri Ram Gupta

Designation: Managing Director Age : 46 Years

Address: C-7/100, Yamuna Vihar, New Delhi – 110 053

Qualification: Graduate In Commerce

Occupation: Business

Experience: 22 years in securities market

DIN: 00110915 PAN: AEKPG6587N

2. Mr. Suresh Kumar Singhal liable to retire by rotation

NIL

Father’s Name: Late Mr. Ram Pratap Singhal

Designation: Executive Director Age : 63 Years

Address:Flat no.10, Navyug

Apartment, Sector-9, Rohini, New Delhi- 110 085.

Qualification : Graduate in Arts Occupation: Self – Employed

Experience: Over 30 years in primary capital markets

DIN : 00807679 PAN : AIDPS1418B

3. Mr. Jitendra Mahajan liable to retire by rotation

NIL

Father’s Name: Mr. Kewal Krishan Mahajan

Designation: Independent Non-Executive Director

Age : 40 Years

Add: 1/7049, Vishnu Marg, Shivaji

Park, Gali No. 5, Shahdara, New Delhi- 110 032


42

Qualification : Graduate in Arts Occupation: Service

Experience: Over 10 years in public relations and liaisoning

DIN : 01658342 PAN : AHNPM8616L

4. Mr. Sandeep Kumar Khandelwal liable to retire by rotation

NIL

Father’s Name: Late Mr. Gopal Dass Khandelwal

Designation: Independent Non-Executive Director

Age : 40 Years

Address: H. No. 82, 2nd Floor,

Vivekanand Puri, Sarai Rohila, New Delhi – 110 007

Qualification : Graduate in commerce

Occupation: Service

Experience: Over 15 years in Mutual Fund and Insurance sector

DIN : 00131294 PAN : AHFPK9565N

Note: None of the above mentioned Directors are on the RBI List of wilful defaulters.

Confirmation from Directors None of our directors hold or have held Directorships, in companies which are/were suspended from being traded on the Bombay Stock Exchange Limited/National Stock Exchange of India Limited during the past 5 years.

None of our directors hold or have held Directorships, in companies which are/were delisted from the Stock Exchanges in India.

Nature of Family Relationship between any of Directors: There is no Family Relationship between any of the present Directors.

Arrangements / understanding for appointment of directors There is no arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any of the directors was selected as a director or member of senior management.

Details of Service Contracts There is no service contract entered into by the directors with our company providing for benefits upon termination of employment Common Pursuits Our Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by our Company.


43

MANAGEMENT ORGANISATION STRUCTURE

Key Managerial Personnel

Senior Manager – Accounts : Mrs. Nisha Gupta is a member of ICAI, qualified in November 2005. She did her graduation in commerce (honours) from Delhi University. She has about 5 years of experience in corporate accounts, auditing and taxation.Befor joininmg our company shae was employed with Sanjay Rastogi & Company, Chartered Accountants, Minar Travels (India) Pvt. Ltd. and Switzerland Destination Marketing India Pvt. Ltd. She has been associated with our company since 1st July 2010. Company Secreatry and Compliance Officer : Ms. Khyati Bansal is a Company Secretary, qualified in August, 2010. She did her graduation in commerce from Delhi University. She is well versed with the provisions of Companies Act, other corporate laws and secretarial matters. She has been associated with our company since 11th November, 2010. Chief Dealer- Capital Markets : Mr. Avinash Verma did his graduation in commerce from Delhi University in 2008. He has been associated with our company since December 2010 and has good knowledge and experience in capital market dealings, funds and securities settlement and other trading aspects.

Board of Directors

Managing Director Mr. Bhisham Kumar Gupta

Senior Manager (Accounts & Finance). (Mrs. Nisha Gupta)

Company Secretary & Compliance Officer (Ms. Khyati Bansal)

Manager – Accounts (Mr. Sunil Verma)

Assistant Manager – Accounts (Mrs. Anjali Aggarwal)

Chief Dealer – Capital Markets (Mr. Avinash Verma)

Assistant Dealer- Capital Markets (Ms. Ekta Sharma)

Support Staff


44

SECTION VI – FINANCIAL INFORMATION

AUDITORS’ REPORT ON FINANCIAL STATEMENTS

AUDITORS' REPORT To, THE MEMBERS OF BAMPSL SECURITIES LIMITED

1. We have audited the attached Balance Sheet of BAMPSL SECURITIES LIMITED as at

31st December 2010 and also the Profit and Loss Account of the Company for the period ended 31st December 2010 annexed hereto and the cash flow statement for the period ended on that date. These financial statements are the responsibility of Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in

India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Company

Law Board in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph (1) above:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the

Company, so far as appears from our examination of the books;

c) The Balance Sheet and Profit & Loss A/c dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow

Statement dealt with by this report are in compliance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 and are in agreement with the books of accounts excepts AS-15 (revised 2005) Employee Benefits.

e) On the basis of the written representation received from the Directors and taken on

record by the Board of Directors, we report that none of the said Directors are disqualified as on 31st December 2010 from being appointed as directors in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanation

given to us, the said accounts read together with the notes give the information required by the Companies Act, 1956 in the manner so required and given a true and fair view, subject to Note No. 1 of Notes on Accounts regarding valuation of stock, in conformity with the accounting principles generally accepted in India:-


45

a). In the case of the Balance Sheet, of the state of affairs of the Company as at

31st December, 2010,

b). In the case of the Profit and Loss Account, of the Profit of the Company for the period ended on that date, and

c). In the case of the Cash Flow Statement, of the cash flows for the period

ended on that date.

For G.C. Agarwal & Associates Chartered Accountants Firm Regn. No. 017851N (G.C. Agarwal) Prop. M.No. 083820 Place: New Delhi Dated: 05-02-2011

ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph A of the Report of even date on the accounts of BAMPSL SECURITIES LIMITED, for the period ended 31st December 2010. 1. (a) The company has maintained proper records showing full particulars including

quantitative details and situation of fixed assets.

(b) As explained to us fixed assets have been physically verified by the management during the accounting period, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verification.

(c) No fixed assets have been disposed off during the year.

2. (a) As explain to us, most of the trading of the company in sale / purchase of shares is in

dematerialised form, verification of stock of share and security has been conducted at reasonable intervals by the management.

(b) In our opinion, the procedures followed by management for the verification of stocks, were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) As informed by the management of the company, the discrepancies to the extent

ascertained, if any, between the stocks and the book balances, are not material and properly dealt with in the books of account.

3. The Company has neither granted nor taken any loans, secured or unsecured from

companies, firm or other parties covered in the register, maintained under section 301 of the Companies Act, 1956, Accordingly, the clauses 4(iii)(b), (c) & (d) of the order are not applicable.


46

4. In our opinion and according to the information and explanation given to us, there are

adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases and sale of shares and for the purchase of Fixed Assets. During the course of our audit, no major weakness has been noticed in the internal control.

5. (a) Based on the audit procedures applied by us, and according to the information and

explanations provide by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanation given to us, the

transaction made, if any, in pursuance of contracts or arrangement entered in to the register maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

6. The company has not accepted any public deposits under the provisions of section 58A of

Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975, during the year under report.

7. The Company has its own internal audit system commensurate with the size of the

company and nature of its business. 8. The Central Government has not prescribed maintenance of cost records under section

209(1)(d) of the Companies Act, 1956 for the items dealt in by the company. 9. According to the records of the company, there were no undisputed amounts payable in

respect of Provident fund, Investor Education and Protection fund, Employees’ State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty, cess outstanding as at 31st December 2010 for a period of more than six months from the date they become payable.

10. The company has no accumulated losses at the beginning of the year. The Company has

neither incurred cash loss during the period covered by our audit nor in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to the financial institutions or

banks or debenture holders. 12. The Company classified its loan and advances as unsecured but considered goods,

therefore clause 4(xii) of order is not applicable. 13. Clause 4(xiii) of the order is not applicable to the company. 14. Subject to point no. B (1) of notes to account of Schedule No. 14 proper records of the

transactions and contract of purchase and sales of securities have been maintained by the company. It has been informed by the management that timely entries of each transaction have been maintained, and company in its own name has held all the shares and securities.

15. According to the information and explanations given to us, the company has not given

any guarantee for loans taken by others from banks and financial institutions. 16. According to the information and explanations given to us, the company has not taken

any term loans. Accordingly clause 4(xvi) is not applicable.


47

17. According to the information and explanations given to us, the company has not raised

short-term funds/long term funds during the year. Accordingly clause 4(xvii) is not applicable.

18. According to the information and explanations given to us, the company has not raised

during the year shares capital through preferential allotment of shares. Accordingly clause 4(xviii) is not applicable

19. According to the information and explanations given to us, the company has not issued

debentures. Accordingly clause 4(xix) is not applicable. 20. The company has not raised money by public issue during the year. 21. During the course of our examination of the books and records of the company, carried

out in accordance with the auditing generally accepted in India, we have neither come across any instance of fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.

For G.C. Agarwal & Associates Chartered Accountants Firm Regn. No. 017851N (G.C. Agarwal) Prop. M.No. 083820 Place: New Delhi Dated: 05-02-2011


48

Balance Sheet As At

(Amt in ` lacs)

The Schedules referred to above form an integral part of the Balance Sheet.

PARTICULARS SCHD. 31.12.2010 31.3.2010 AMOUNT(`) AMOUNT(`) SOURCES OF FUNDS : Share Capital 1 1,029.94 1,029.94 Reserves & Surplus 2 428.00 398.68 Deferred Tax Liability 1.20 0.78 1,459.14 1,429.40 APPLICATION OF FUNDS Fixed Assets Gross Block 3 47.59 47.59 Less : Depreciation 16.68 13.74 Net Block 30.91 33.85 CURRENT ASSETS, LOANS & ADVANCES

CURRENT ASSETS Sundry Debtors, Loans and Advances 4 1,294.02 1,179.77 Closing Stock 9 143.44 185.84 Other Current Assets 6 10.90 11.17 Cash & Bank Balance 5 1.11 20.80 1,449.47 1,397.58 LESS: CURRENT LIABILITIES & PROVISIONS

7 35.40 12.70

1,414.07 1,384.88 MISC. EXPENDITURE (To the extent not written off or adjusted)

8 14.16 10.67

1459.14 1429.40 14 Significant Accounting Policies

and Notes to Accounts


49

Profit & Loss Account for the year ended

(Amt in `. lacs)

The Schedules referred to above form an integral part of the Profit & Loss Account.

PARTICULARS SCHD. 31.12.2010 31.03.2010

AMOUNT(`) AMOUNT(`)

INCOME Income from Operations 9 19.68 11.12 Other Income 10 43.05 35.58 62.73 46.70 EXPENDITURE Salaries & Benefits 11 4.98 5.09 Administrative expenses 12 15.78 19.99 Financial Charges 13 0.07 0.03 Depreciation 3 2.94 2.31 Preliminery Expenses Written off 8 2.42 3.22 26.18 30.65 Profit before Tax 36.55 16.06 Less: Current Tax Less: Provision for Income Tax 6.80 4.96 Add: Provision for Deferred Tax 0.43 (0.32) Profit after tax 29.32 11.41 Less: Transfer to Statutory Reserve as per sec. 45-IC of RBI Act, 1934

5.86 2.28

Profit & Loss transferred to Balance Sheet 23.45 9.13 NOTES TO THE ACCOUNTS 14


50

Cash flow Statement prepared from the Financial Statements for the year ended December 31, 2010

(Amt in ` lacs)

Particulars Amount (`) Amount (`) A. Cash Flow from operating Activities 23.45 Net Profit Adjustment for non cash expenditure Depreciation 2.94 Provision for Deferred Tax Assets 0.43 Misc Expenses w/o 2.42 Provision for Statutory Reserve 5.86 11.64 Operating Profit before Working Capital changes 35.10 Add/Less Decrease in Stock 42.39 Increase in Trade Payable 22.70

Increase in Trade Receivables and Other Receivables (113.97)

Net Cash from operating activities (48.88)

B. Cash Flow from Investing Activities Increase in Fixed Assets - -

C. Cash Flow from Financial Activities Add/Less Increase in Miscellaneous Assets (5.91)

Net Decrease in Cash (19.69)

Cash & Cash Equivalent(Opening Balance) 20.80 Cash & Cash Equivalent(Closing Balance) 1.11


51

Schedules forming part of accounts (Amt in ` lacs)

PARTICULARS 31.12.2010 31.03.2010 SCHEDULE 1 SHARE CAPITAL Authorised Capital 31,00,00,000 Equity Shares of Re. 1/- each 3,100.00 3,100.00

ISSUED, SUBSCRIBED AND PAID - UP CAPITAL 10,29,94,080 Equity Shares of Re.1/- each 1,029.94 1,029.94

1,029.94 1,029.94

SCHEDULE 2 RESERVES AND SURPLUS Profit and Loss A/c Opening Balance 195.30 186.17 Add: Profit for the year 23.45 9.13

a) 218.76 195.30 Statutory Reserve Opening Balance 203.37 201.09 Add: Transfer during the year 5.86 2.28

b) 209.24 203.37 (a+b) 428.00 398.68

SCHEDULE 4 SUNDRY DEBTORS, LOANS AND ADVANCES Sundry Debtors - More than six months 0.03 2.01 - Others 607.92 643.49 Loans and Advances Loan:- Unsecured but considered good 686.07 534.27 (Advances recoverable in cash or in kind or for value to be received ) 1,294.02 1,179.77 SCHEDULE 5 CASH & BANK BALANCE Balance with Scheduled Bank 0.26 7.99 Cash in hand 0.85 12.81

1.11 20.80 SCHEDULE 6 OTHER CURRENT ASSETS TDS Recoverable 0.16 0.07 Income Tax Refundable 3.68 4.03 Unclaimed Dividend Bank Accounts 7.06 7.06

10.90 11.17 SCHEDULE 7 CURRENT LIABILITIES & PROVISIONS Sundry Creditors 16.08 - Expenses Payable 0.25 0.52 Duties and Taxes - 0.02


52

Audit Fees Payable 0.25 0.14 Unclaimed Dividend 7.06 7.06 Provision for Income Tax 11.76 4.96

35.40 12.70 SCHEDULE 8 MISC. EXPENDITURE ROC Charges 9.69 7.60 Add:- ROC Charges Current Year - 4.99

9.69 12.59 Less: Written off during the year 2.17 2.90

a) 7.52 9.69

Bonus Issue Charges 0.98 1.30 Less: Written off during the year 0.24 0.33

b) 0.73 0.98 5.91 -

(a+b+c) 14.16 10.67

SCHEDULE-9 Income From Operation PARTICULARS Sales 8,473.98 7,136.52 Closing Stock 143.44 185.84

A 8,617.43 7,322.35

Opening Stock Purchases 185.84 416.52 Direct Expenses 8,409.37 6,892.18

2.54 2.53 B 8,597.75 7,311.23

SCHEDULE 10 OTHER INCOME Discount Received 11.12 Interest Income 43.05 35.51 Misc. Balances W/o - 0.02 Dividend Income 0.00 Refund - 0.01

43.05 35.58

SCHEDULE 11 SALARIES & BENEFITS Salaries & Wages 4.50 4.38 Director's Remuneration 0.45 0.60 Staff Welfare 0.03 0.11

4.98 5.09 SCHEDULE 12 ADMINISTRATIVE EXPENSES Advertisement Exp 0.51 0.46 AGM Exp 0.36 0.35 Audit Exp 0.25 0.24 Bad Debts - 8.06 Business Promotion 0.03 0.09 Car Insurance - 0.07 Computer Exp - 0.19


53

Consultancy Fee - 0.25 Depository Exp. 0.20 0.18 Electricity 0.33 0.22 Fees & Subscription 4.95 1.43 Professional fee 0.86 Legal & Secretarial Exp. 0.06 0.08 Mis. Exp. 0.38 0.10 Petrol & Conveyance 0.09 0.10 Photostat 0.01 0.04 Postage & Telegram 0.70 0.82 Printing & Stationary 4.54 0.88 Rent 0.77 1.80 Repair And Maintenance 1.35 - STT 0.17 4.43 Telephone Exp 0.23 0.21

TOTAL 15.78 19.99

SCHEDULE 13 FINANCIAL CHARGES Bank Charges 0.07 0.03 TOTAL 0.07 0.03


54

SCHEDULE - 3 FIXED ASSETS

PARTICULARS GROSS BLOCK DEPRECIATION WRITTEN DOWN VALUE

Rate

As on 01.04.2010`

Addition during the

period

Assets Written

off or sold

during the

period As on

31.12.2010 Upto

31.03.2010 For the period

Total As on 31.12.2010

As on 31.12.2010

As on 31.03.2010

FIXED ASSETS

Computers 16.21% 833,250.00 - - 833,250.00 504600.55 101,302.37 605,902.92 227,347.08 328,649.45 Furniture & Fixtures 6.33% 1,966,072.00 - - 1,966,072.00 74283.95 93,339.27 167,623.22 1,798,448.78 1,891,788.05

Office equipments 4.75% 143,065.00 - - 143,065.00 40216.59 5,096.69 45,313.28 97,751.72 102,848.41

Car 9.50% 755,279.00 - - 755,279.00 548461.51 53,813.63 602,275.14 153,003.86 206,817.49

Generater 4.75% 112,640.00 - - 112,640.00 19853.40 4,012.80 23,866.20 88,773.80 92,786.60

Fax 4.75% 6,500.00 - - 6,500.00 957.75 231.56 1,189.31 5,310.69 5,542.25

Fregers 4.75% 915,250.00 - - 915,250.00 179402.38 32,605.78 212,008.16 703,241.84 735,847.63

Printers 16.21% 26,750.00 - - 26,750.00 6242.55 3,252.13 9,494.68 17,255.32 20,507.45

Total 4,758,806.00 0.00 0.00 4,758,806.00 1,374,018.68 293,654.23 1,667,672.91 3,091,133.09 3,384,787.33

Previous year 2,641,220.00 2,117,586.00 - 4,758,806.00 1,143,128.00 230,890.67 1,374,018.67 3,384,787.33 1,498,092.00


55

Schedule-14 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS A. Significant Accounting policies

(i) Financial Year

Current Financial Year consists of nine months starting from 1st April 2010 to 31st December 2010.

(ii) Basis of Preparation of Financial Statements;

(a) The financial statements have been prepared under the historical cost convention in

accordance with the normally accepted accounting principles and the provisions of the Companies Act, 1956.

(b) Accounting Policies not specifically referred to otherwise are consistent and in line with

generally accepted accounting principles.

(iii) Nature of Business & Revenue Recognisation

(a) The Company is dealing in shares and securities for its own and maintained records for same. It maintains a scrip register in which all types of shares purchased and sold are recorded.

(b) All income and expenditure are accounted for on mercantile basis excepts as stated otherwise.

(iv) Fixed Assets and depreciation.

(a) Fixed Assets are stated at cost less Accumulated Depreciation.

(b) Depreciation on Fixed Assets has been provided on Straight Line Method at the rates and

in the manner specified in Schedule XIV to the Companies Act, 1956.

(v) Investment The Company having policies to valued its investment at cost.

(vi) Accounting & Valuation of Inventory:

Inventory of shares is valued at cost price following first-in-first out method.

(vii) Retirement benefits:

The Company having policies of payment of retirement benefit and gratuity on cash basis, where applicable.

(viii) Contingent Liabilities:

Contingent Liabilities are not provided for and are disclosed by way of notes, if any.


56

B. Notes to the Accounts 1. (a) The inventory has been valued at cost price following FIFO method of Stock Valuation

instead of cost or market price whichever is lower, as recommended by the Institute of Chartered Accountants of India, as a result the stock of quoted shares has been valued higher by ` 225/- resulting into over stating of profit by ` 225/-. There has no change in the method of valuation of stock as compared to previous year.

(b) The closing stock includes shares/securities for which no official quotations were

available. We have relied upon the value as provided by the management in respect of such shares/securities.

2. Income- Tax The Income-tax liability is provided in accordance with the provisions of the Income-tax

Act, 1961. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

3. As informed, during the year under consideration, Company had not made transaction

with its related parties, within the meaning as per AS-18 issued by Institute of Chartered Accountants of India.

4. As the Company’s business activity falls within a single primary business segment the

disclosure requirement of AS 17 “Segment Reporting”, issued by ICAI are not applicable. 5. Balance of Debtors/creditors outstanding as on Balance Sheet date is subject to

confirmation. 6. Earning per share:

Particulars

Year ended 31.12.2010


Net Profit for the period attributable to equity shareholders.

2345478.93 913164.51

Number of Equity shares 102994080 102994080Basic and diluted earning per share (face Value of Re. 1/-)

0.023 0.009

7. Payment to Auditors;

Particulars



Audit Fees 25000 18000Tax Audit Fees 0 6000

8. Previous period’s figures are re-arranged and regrouped wherever found necessary to

make it comparable with the figures of current period. 9. Directors Remuneration.

Particulars



Bhisham Kumar Gupta 9000 12000Suresh Kumar Singhal 36000 48000


57

10. Schedule 1 to 14 forms an integral part of the Balance Sheet and Profit & Loss Account. C. Additional information pursuant to the provision of Part-II of the Schedule VI of

the Companies Act, 1956.

(i) Due to the volume and peculiar nature of the business it is difficult to summarize the quantity of purchase and sales of each type of Share.

(ii) Closing Stock

31-12-2010 31-03-2010 14344327.18 18583548.18

(iii) Value of raw material and stores consumed

Particulars

Year ended 31-12-2010

Year ended 31-03-2010

Imported NA NA Indigenous NA NA

(iv) Earnings in Foreign Exchange 31-12-2010 31-03-2010 Nil Nil

(iv) Expenditure in Foreign Exchange

31-12-2010 31-03-2010 Nil Nil

Summary of Accounting Ratios

(Amt in ` lacs) 31.12.2010 31.03.2010 31.03.2009 31.03.2008 Net Profit After Tax 29.32 11.41 3.74 183.52 Share Capital 1029.94 1029.94 1029.94 735.67 Net worth 1443.78 1417.95 1408.30 1403.89 Accounting Ratios Earnings per share-(Re.) 0.023 .011 0.003 0.249 Net Asset value per share(`)

1.40 1.37 1.37 1.91

Return on Net Worth (%) 2.03 .80 0.27 13.07 Notes: Basic Earnings per Share (`) = Net Profit after Tax after Extraordinary Items less Preference dividend ----------------------------------------------------------------------------- Number of Equity Shares outstanding during the year Net Asset Value per Share (`) = Net worth excluding Revaluation Reserve ---------------------------------------------------------------- Number of Equity Shares outstanding during the year Return on Net Worth (%) = Net Profit after Tax and before Extraordinary Items ---------------------------------------------------------------- Net worth excluding Revaluation Reserve


58

Net Worth = Equity Share Capital + Reserves & Surplus (Excluding revaluation reserve, if any) – Miscellaneous Expenditure + Preference Share Capital Capitalisation Statement (Amt in ` lacs) Particulars Pre Issue as at

31.12.2010 Post Issue

Short Term Debt NIL NIL Long Term Debt NIL NIL Total Debt NIL NIL Shareholders’ Fund Share Capital - Equity 1029.94 3089.82 - Preference NIL NIL Reserves 428.00 428 Total Shareholders’ Fund 1457.94 3517.82 Long term Debt/ Shareholders’ Funds (Ratio)

NIL NIL

Working Results Contingent Liabilities are not provided for and are disclosed by way of notes, if any. Information as required by the Government of India, Ministry of Finance circular No. F2/5/SE/76 dated February 5, 1977, as amended further on March 8, 1977 and in accordance with sub-item (B) of item X of Regulation (5) of Part E of the SEBI (ICDR) Regulations. Working results for the period from April 1, 2010 to March 31, 2011

(Amt in ` lacs)

Particulars Amount Income from Operation/ Turnover 21.66 Other Income 57.65 Total Income 79.31 Estimated Gross Profit Before Depreciation and Tax 60.18 Provision for Depreciation 3.92 Provision for Taxes 12.57 Estimated Net Profit 43.69

There are no material changes and commitments, which are likely to affect the financial position of the Company.


59

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY 1. The high and low closing prices recorded on the BSE for the preceding three Fiscals and

the number of Equity Shares traded on the days the high and low prices were recorded are stated below Year High Low

Date ` Volume (in no.

of shares) Date ` Volume (in

no. of shares) 2008-09 15.09.08 1.45 7,08,499 12.03.09 0.34 2,98,784 2009-10 29.03.10 1.85 42,52,600 22.04.09 0.37 59,521 2010-11 31.03.11 3.69 33.65,518 15.07.10 0.96 30,80,885

2. The high and low prices and volume of Equity Shares traded on the respective dates

during the last six months is as follows BSE Details of High Price Details of Low Price

Month ` Date Volume ` Date Volume December, 2010 2.50 08.12.2010 15,51,684 2.00 24.12.2010 27,29,820 January, 2011 3.28 31.01.2011 11,89,928 2.40 03.01.2011 40,08,677 February, 2011 3.42 21.02.2011 13,25,821 2.81 28.02.2011 2,40,690 March, 2011 3.69 31.03.2011 33,65,518 2.44 08.03.2011 60,45,087 April, 2011 4.66 13.04.2011 1,55,78,703 1.67 19.04.2011 5,31,153 May, 2011 3.76 13.05.2011 36,70,904 2.30 30.05.2011 10,15,787

3. The Ordinary Shares of our Company are actively traded on The Bombay Stock Exchange Limited.

4. Please refer to section titled "Capital Structure" beginning on page no. 21 of this Letter of

Offer for details regarding transactions in the securities of our Company undertaken by the promoters, relatives and directors of our Company during the last 6 months, from the date of filing of offer document with SEBI and updated till date.

The week-end prices of the Equity Shares of our Company on the BSE in the last four weeks

Week Ended Closing Price (`) High (`) Low (`) May 20, 2011 2.93 3.66 2.88 May 27, 2011 2.38 2.93 2.33 June 03, 2011 2.54 2.73 2.30 June 10, 2011 2.44 2.59 2.41

Current Market Price of the Company on BSE is ` 2.36 (June 15, 2011)

Highest and lowest prices of equity shares during last four weeks

Particulars Date Price Highest Price 16.05.2011 3.66 Lowest Price 30.05.2011 2.30

The issue price for the proposed rights issue of equity shares has been arrived at in consultation between the issuer and the Lead Manager.


60

SECTION VII – LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

Except as described below and in the notes to the financial statements, there are no contingent liabilities not provided for, outstanding litigations, disputes, non payment of statutory dues, overdue to banks/ financial institutions, defaults against banks/financial institutions, defaults in creation of full security as per terms of issue/other liabilities, proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of part I of Schedule XIII of the Companies Act, 1956) against our Company save and except the following: Contingent Liabilities (not provided for as of 31.12. 2010) There are no contingent liabilities not provided for by our company as on 31.12.2010 Guarantees Given by Our Company to third parties Our company has not given any guarantee to any third party / group company in last three years and there are no guarantees outstanding as on the date of this Letter of Offer There are no pending matters, would materially and adversely affect the operations of financial position There are no matters which are pending or which have arisen in the immediately preceding 10 years involving:

1. Issue of moral turpitude or criminal liability on the part of our company 2. Material violation of statutory regulations by our company 3. Economic offences where proceedings have been initiated against our company.

No penalties in past have been imposed on our Company, Directors of our Company, Promoters or Promoter Group Companies for any economic offences.


61

GOVERNMENT AND OTHER APPROVALS

In view of the approvals listed below, we can undertake our current business activities and that no further major approvals from any governmental or regulatory authority or any other entities are required to undertake or continue our business activities. These approvals are all valid as of the date of this t Letter of Offer.

I. INCORPORATION:

1. Certificate of Incorporation bearing No. 55-65028 dated 3rd February, 1995 from the Registrar of Companies, National Capital Territory of Delhi and Haryana.

2. Certificate of Commencement of Business dated 20th February, 1995 from the Registrar of Companies, National Capital Territory of Delhi and Haryana.

3. The Company Identification Number (CIN) is L74899DL1995PLC065028 II. APPROVALS FOR BUSINESS / GENERAL APPROVALS:

1. NBFC certificate No. 14.00856 dated May 25, 1998 issued by RBI. 2. Allotment of Tax Deduction Account No. DELB08306E issued under section 203A of

the Income Tax Act, by the Income Tax Department. 3. Permanent Account Number of our company - AAACB3769Q

MATERIAL DEVELOPMENTS There are no material developments after the date of last financial statement which may have an impact on the performance and prospects of our company.


62

OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the issue: The Rights issue has been authorized by the Board of Directors at its meeting held on March 02, 2010 and April 16, 2010. PROHIBITION BY SEBI: Our Company, our Promoters, our promoter group, our Directors, or our group companies have not been prohibited from accessing or operating in the capital markets nor restrained from buying, selling or dealing in securities under any order or direction passed by SEBI. None of our directors except Mr. Bhisham Kumar Gupta, are associated with securities market in any manner, except as general investors and SEBI has not initiated any action against our directors in this regard.

Our Company was never registered with SEBI in any capacity Mr. Bhisham Kumar Gupta is associated as a sub –broker of Adroit Financial Services Private Limited for BSE and NSE. SEBI has granted the sub broker registration no. INS017550711/01-12283 dated May 26, 2009 for BSE and registration no.INS238100916/23-08538 dated September 22, 2009 for NSE. Further, our company, our Promoters, their relatives (as per the Companies Act, 1956), and Group Companies are not declared as wilful defaulters by RBI or other authorities and there are no violations of securities law committed by them in the past or pending against them. Compliance with Part E of Schedule VIII of the SEBI Regulations Our company is in compliance with the provisions specified in Part E of Schedule VIII of the SEBI Regulations. Approvals for the Issue & Business Activity Our Company is not proposing to enter into any new line of business and has all the necessary approvals for undertaking its present activities and no further approvals from any Government authority are required by our Company to undertake its present activities. Our Company can undertake the activities proposed in view of the present approvals and will take necessary steps, if any, at the appropriate time to obtain any Government /statutory clearances for activities to be undertaken from the proceeds of the issue. Disclaimer Clause of SEBI IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF LETTER OF OFFER TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MERCHANT BANKER, ARIHANT CAPITAL MARKETS LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.


63

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF OFFER, THE LEAD MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MERCHANT BANKER, ARIHANT CAPITAL MARKETS LIMITED, HAS FURNISHED TO SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) A DUE DILIGENCE CERTIFICATE DATED AUGUST 06, 2010 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE COMPANY,

WE CONFIRM THAT:

A. THE DRAFT LETTER OF OFFER FILED WITH SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

B. ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS, GUIDELINES, INSTRUCTIONS, ETC. FRAMED / ISSUED BY SEBI, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

C. THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE

INTERMEDIARIES NAMED IN THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATIONS ARE VALID;

4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS - Not Applicable;


64

5. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIS PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER OF OFFER WITH SEBI TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER - Not Applicable

6. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER - Not Applicable.

7. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE - Not Applicable.

8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

9. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE LETTER OF OFFER. WE FURTHER


65

CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. Noted For Compliance

10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.

11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHNAGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION.

12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER:

A. AN UNDERTAKING FROM THE COMPANY THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE COMPANY AND;

B. AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHNAGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHILE MAKING THE ISSUE.

14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE COMPANY, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE, ETC.

15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHNAGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

The filing of Letter of Offer does not, however, absolve our Company from any liabilities under Section 63 or Section 68 of the Act or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Manager any irregularities or lapses in the Letter of Offer. In addition to the Lead manager, the issuer is also obligated to update the offer document and keep the public informed of any material changes till the date of listing and commencement of trading of the securities offered under this Letter of offer.


66

Caution: Our Company and the Lead Manager accept no responsibility for statements made otherwise than in the Letter of Offer or in the advertisements or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information would be doing so at his/her/their own risk. Investors who invest in the issue will be deemed to have represented to the issuer and lead manager and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire equity shares of our company, and are relying on independent advice / evaluation as to their ability and quantum of investment in this issue. All information shall be made available by the Lead Manager and our company to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at road shows, presentations, in research or sales reports. etc Disclaimer in Respect of Jurisdiction: This Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations hereunder. This Letter of Offer does not constitute an offer to sell or an invitation to subscribe to securities hereby issued, in any jurisdiction other than India. The distribution of the Letter of Offer and the offering of the securities on a rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons into whose possession this Letter of Offer may come are required to inform themselves about and observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate Court(s) in Delhi, India only. No action, has been, or will be taken, to permit offering of these securities in any jurisdiction where action would be required for that purpose, except that this Letter of Offer has been filed with SEBI for its observations and the Letter of offer would be filed with the relevant Stock Exchanges in India. Accordingly, the Equity Shares may not be offered or sold directly or indirectly, and the Letter of Offer may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of the Letter of Offer, nor any sale hereunder, shall under any circumstances create any implication that the affairs of our company have remained unchanged since the date hereof or that the information herein is correct as of any time subsequent to this date. Disclaimer clauses of Stock Exchanges Our company’s shares are proposed to be listed on Bombay Stock Exchange Limited, Delhi Stock Exchange Limited, and Jaipur Stock Exchange ltd. (Stock Exchanges) on which the existing shares of our company are presently listed. As per the requirement of clause 7(b) (iii) of SEBI ICDR Regulations, we have applied for obtaining the in-principle approval from BSE. BSE vide its letter dated September 3, 2010, has given its permission to our Company to use their respective names in the Letter of Offer as the stock exchange on which our Company's shares issued in terms of this Issue are proposed to be listed. The Stock Exchange has scrutinized this Letter of Offer for their limited internal purpose of deciding on the matter of granting the aforesaid permission to our Company. We have also filed this Letter of Offer with JSE and DSE and will be making a listing application to JSE and DSE along with BSE for listing of the shares issued pursuant to this issue. BSE shall be the designated Stock Exchange for the purpose of this Issue.


67

Disclaimer Clause of the BSE BSE does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this Company, its Promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer clause of the JSE JSE does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this Company, its Promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer clause of the DSE DSE does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this Company, its Promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer Clause of the RBI We have obtained registration from RBI as a non-deposit accepting Non-Banking Finance Company. Our company’s activities are governed by the RBI regulations applicable to non-deposit accepting NBFCs. It must be distinctly understood, however, that in issuing the certificate of registration Reserve Bank of India does not undertake any responsibility for the financial soundness of our company or for the correctness of any of the statements made or any commitments made or opinion expressed.


68

Filing: The Letter of Offer has been filed with Securities Exchange Board of India's Regional Office – Delhi 5th Floor, Bank of Baroda Building,16, Sansad Marg, New Delhi - 110 001, for its observations and also with the BSE, JSE and DSE where the securities to be issued in terms of this Letter of Offer are proposed to be listed. Listing: Our Company would be making applications to the BSE, JSE and DSE for permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of this Letter of Offer. If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock Exchanges mentioned above, within 15 days from the Issue Closing Date, our Company shall forthwith repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such money is not paid within eight days after our Company becomes liable to repay it, then our Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under subsections (2) and (2A) of section 73 of the Companies Act. Consent Consent in writing of the Auditors, Lead Manager and the Registrar to the Issue, bankers to the issue to act in their respective capacities; and of the bankers to our Company and Directors for their names to appear as such in this Letter of Offer have been obtained and such consents have not been withdrawn up to the time of delivery of this Letter of Offer for registration with the Stock Exchange. M/s G.C. Agarwal & Associates the Auditors of our Company have given their written consent for the inclusion of their Report in the form and content as appearing in this Letter of Offer and such consents and Reports have not been withdrawn upto the time of delivery of this Letter of Offer for registration to the Stock Exchange. M/s G.C. Agarwal & Associates., the Auditors of our Company have given their written consent for inclusion of statement of tax benefits in the form and content as appearing in this Letter of Offer accruing to our Company and its members. To the best of our knowledge there are no other consents required for making this issue, however, should the need arise, necessary consents shall be obtained by us. Expert Opinion Save and except as stated in the section titled “Financial Information” and chapter titled “Statement of General Tax Benefits” beginning on page no. 44 and 29 respectively of this Letter of Offer, our Company has not obtained any expert opinions in relation to this Letter of Offer. Issue expenses The Issue related expenses inter-alia includes issue management fees, registrar fees, printing and distribution expenses, auditor fees, advertisement expenses, stamp duty, depository charges and listing fees to the stock exchanges. The following table provides a break up of estimated


69

Issue expenses: (` in lacs)

Sr. No. Particulars Estimated

amount

As percentage of total Issue

expense

As percentage of total Issue

size

1.

Intermediary Fees- a. Lead Manager Fees b. Registrar’s Fees c. Banker’s Fees

10.01.01.0

33 3 3

0.480.050.05

2. Advertisement 9.0 30 0.44

3. Printing & Stationery and Postage expenses

4.0 14 0.19

4. SEBI, Stock Exchange and ROC Fees 5.0 17 0.24

Total 30.00 100 1.45

Compulsory Dematerialised Dealing: The equity shares of our Company are to be traded compulsorily under dematerialized trading for all investors. Our Company has an agreement with Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) and its equity shares bear the ISIN No INE802A01029. Underwriting Commission, Brokerage and Selling Commission. No Underwriting Commission, Brokerage and Selling Commission will be paid for the Issue. Mechanism evolved by Our Company for redressal of Investor grievances The transfer of shares and other related work is handled by Alankit Assignments Limited, our Registrar and Share Transfer agents. The Secretarial Department of our company actively interacts with Registrar & Transfer Agent for expeditious redressal of investor grievances and takes care of complaints received from statutory bodies such as SEBI, Stock Exchanges, Department of Company Affairs, etc. Our Company's investor grievances related to allotment, refund etc. arising out of the issue will be handled by Alankit Assignments Limited, Registrars to the issue. The Registrars will have a separate team of personnel handling only the post issue correspondence of our Company. Investor grievances would be settled expeditiously and satisfactorily by our Company. The approximate time taken by our company to dispose off the investor grievance is 30 days from the date of receiving the complaint. The agreement between our Company and the Registrars to the issue will provide for retention of records with the Registrars for a period of at least one year from the last date of dispatch of letter of allotment/ share/ certificate/ refund order to enable the Registrars to redress grievances of investors. All grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such as folio No., name and address of the first applicant, Equity Shares, Application Form serial number, amount paid on application and the Bank Branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should be furnished. The average time taken by the Registrars for attending to routine grievances will be 15 days from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrars to attend to them as expeditiously as possible. Our Company undertakes to resolve its investor grievances in a time bound manner.


70

Number of investor complaints received during three years preceding the filing offer document with Board & complaints disposed. Sr. No.

Year No. of Complaints

pending at the beginning of the

period

No. of complaints Received

No. of complaints

resolved

No. of Complaints

pending at the end of the period

1 2007-08 NIL 02 02 NIL 2 2008-09 NIL 04 04 NIL 3 2009-10 NIL 02 02 NIL

Number of investor complaints pending on the date filing offer document with Board. There are no investors’ complaints are pending to be resolved, as on the date of filing this Letter of Offer. Our Company has a Compliance Officer who may be contacted in case of any pre-issue/post-issue related queries. Compliance Officer Ms. Khyati Bansal Company Secretary 100-A, Cycle Market, Jhandewalan Extension, New Delhi – 110055 Tel No.: + 91-11- 2355 6436, Fax No.: + 91-11- 2361 7013 E-mail: [email protected]


71

SECTION VIII – ISSUE RELATED INFORMATION

TERMS OF THE PRESENT ISSUE The Equity Shares being issued pursuant to the Rights Issue are subject to the provisions of the Companies Act, 1956, the Memorandum and Articles of Association, the terms of this Letter of Offer, the enclosed CAF, and other terms and conditions as may be incorporated in the allotment advices and/or other documents / certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws as applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Govt. Of India, Stock Exchanges, RBI, and / or other authorities, as in force on the date of the issue and to the extent applicable. Ranking of equity shares The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of Association and shall rank pari passu, with the existing Equity shares of the Company including rights in respect of dividend. The allottees in receipt of allotment of equity shares under this issue will be entitled to dividends and other corporate benefits, if any, declared by the company after the date of allotment. .

Mode of Payment of Dividend Dividend, if any declared by the Board and approved by our shareholders, will be paid in any of the modes permitted by the Companies Act, 1956. Face value and issue price Face value Each Equity Share shall have the face value of Re. 1 (Rupee One). Issue Price Re. 1 (Rupee One) per Equity share. Payment Method The full amount of Re. 1/- per Equity Shares shall be payable by the applicant on application (“Application Money”).

Rights of Equity Shareholders Subject to applicable laws, Equity Shareholders shall inter-alia have the following rights: 1. Right to receive dividend, if declared; 2. Right to attend general meetings and exercise voting power, unless prohibited by law; 3. Right to vote on poll, either in person or proxy; 4. Right to receive offer for rights shares and be allotted bonus shares if announced; 5. Right to receive surplus on liquidation; 6. Right of free transferability of share; and 7. Such other rights as may be available to a shareholder of a listed public company under the

Companies Act and our Memorandum and Articles of Association of our Company and the terms of the listing agreement with the Stock Exchange.

Market lot The securities of our Company are tradable only in dematerialized form. The market lot for the Equity Shares in dematerialized mode is one. In case of holding in physical form, our Company would issue to the allottees separate certificate for the Equity Shares allotted on rights basis with a split performance.


72

Our Company would issue one certificate for the entire allotment. However, our Company would issue split certificates on written requests from the shareholders. Investors may please note that the Equity Shares of our Company can be traded on the Stock Exchange in dematerialized form only. Nomination facility In terms of section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the Registered Office of our Company or such other person at such addresses as may be notified by our Company. The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has / have already registered the nomination with our Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicant requires change in the nomination, they are requested to inform their respective DP.

Minimum Subscription If our Company does not receive the minimum subscription of ninety per cent of the Issue through this letter of offer on the date of the closure of the Issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the Issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. 15 days after closure of the Issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of section 73 of the Companies Act. In case the permission to deal in and for an official quotation of the Equity Shares is not granted by BSE, JSE and DSE; the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of this Letter of Offer and if such money is not repaid within eight days after the day from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under sub-section (2) and (2A) of section 73 of the Companies Act, 1956.

Additional subscription by promoters The promoters / promoter group have undertaken to subscribe to their entitlement and /or renounce in favour of entities / persons whose shareholding will be classified under promoter group; as well as apply for such number of additional shares beyond their entitlement, collectively, in the event the issue is undersubscribed, so as to ensure full subscription to the issue. This acquisition of additional Equity Shares, if allotted to the promoter / promoter group


73

shall be in terms of proviso to regulation 3 (1) (b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1) (b)(ii) of the Takeover Code. Further, such acquisition of additional shares will not result in change of control of management of our Company.

The promoter / promoter group have undertaken to subscribe to the equity shares over and above their entitlement. Assuming that the entire rights issue of 20,59,88,160 Equity Shares is subscribed to by and allotted to our promoters, their shareholding in our company will increase to 69.10% whereby our company will continue to be in compliance with Clause 40A of the Listing Agreement, and public shareholding will continue to be well above the minimum permissible level.

Arrangement for odd lot Equity Shares Our Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this Issue. Our Company will issue a consolidated certificate for the number of shares allotted to the Equity Shareholder. Restrictions, if any, on transfer and transmission of shares and on their consolidation or splitting. Except as stated in the Articles of Association of our Company there are no restrictions on transfer and transmission of shares.

Option to receive Equity Shares in Dematerialized Form Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialized (electronic) form at the option of the applicant. Our Company has signed agreements dated March 21, 2000 and September 17, 1999 with CDSL and NSDL respectively, which enables the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates. In this issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be deemed to have opted for securities in physical form. No separate applications for securities in physical and / or dematerialized form should be made. If separate applications are made, the application for physical securities will be treated as multiple application and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares. Basis for the Issue The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of our Company in respect of shares held in the physical form at the close of business hours on the Record Date, i.e. April 20, 2011fixed in consultation with the Designated Stock Exchange, BSE.

Rights Entitlement Ratio: As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in the register of members as an equity shareholder of our Company as on the Record Date i.e. April 20, 2011 you are entitled to the number of shares in Block I of Part A of the enclosed in the CAF. Please note that pursuant to the SEBI circular dated April 29, 2011,


74

all applicants who are QIBs or are applying in this Issue for Equity Shares for an amount exceeding ` 200,000, shall mandatorily make use of ASBA facility The eligible shareholders shall be entitled to apply for and be allotted 2 [Two] Equity shares for every 1 [One] Equity Share held as on the Record Date.

Rights Entitlement on Equity Shares held in the pool account of the clearing members on the Record Date shall be considered, and such claimants are requested to:

a. Approach the concerned depository through the clearing member of the Stock Exchange with requisite details; and

b. Depository in turn should furnish details of the transaction to the Registrar. Joint Holders Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint holders with benefits of survivorship subject to provisions contained in the Articles of Association of our Company. Notices All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation and/or, will be sent by ordinary post /registered post to the registered holders of the Equity Share at the address registered with the registrar from time to time.

Terms of payment Issue price of Re.1.00/- is to be paid as follows: Amount Payable per Equity Share (`) Face Value (`) Premium (`) Total (`)

On Application 1.00 00.00 1.00 Total 1.00 0.00 1.00 Payment should be made by cheque / bank demand draft / drawn in favour of “BAMPSL Securities Ltd -Rights Issue “R” and marked “A/c Payee” on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the centre where the CAF is accepted. Outstation cheques /money orders / postal orders will not be accepted and CAFs accompanied by such cheque / money orders / postal orders are liable to be rejected. Where an applicant has applied for additional shares and is allotted lesser number of shares than applied for, the excess application money shall be refunded. The monies would be refunded within 15 days from the closure of the Issue, and if there is a delay beyond 8 days from the stipulated period, our Company will pay interest on the monies in terms of sub-sections (2) and (2A) of section 73 of the Companies Act, 1956.


75

ISSUE PROCEDURE Procedure for Application The enclosed CAF for Equity Shares should be completed in all respects in its entirety before submission to the Bankers to the Issue or their designated branches as they appear in the CAF. The forms of the CAF should not be detached under any circumstances; otherwise the application is liable to be rejected. The CAF would be sent to all shareholders at their registered Indian address. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrar to the Issue, Alankit Assignments Limited for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders can obtain a copy of the CAF from the Registrar to the Issue, Alankit Assignments Limited, from their office situated at 2E/21, Jhandewalan Extension, New Delhi–110055 by furnishing the registered folio number, DP ID number, Client ID number and their full name and address. Acceptance of the Issue You may accept the offer to participate in this Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the enclosed CAFs and submit the same along with the application money payable to the Bankers to the Issue or any of the collection branches as mentioned on the reverse of the CAFs before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of our company in this regard. Investors at centres not covered by the branches of collecting banks can send their CAFs together with the cheque drawn at par on a local bank at Delhi/demand draft payable at Delhi to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person or persons subject to the approval of the Board. Such renouncees can only be Indian Nationals (including minor through their natural / legal guardian) / limited companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust / society is authorized under its constitution / bye laws to hold Equity Shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board. The CAF consists of four parts: Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares. Part B: Form for renunciation. Part C: Form for application for renouncees. Part D: Form for request for split application forms. Option available to the Equity Shareholders The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:


76

Option Option Available Action Required A. Accept whole or part of your

entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

C. Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign)

D. 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s) OR 2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. (i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). (ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

E. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Option A: Acceptance of the Issue in full or in part You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling part A of the enclosed CAF. For details of submission of CAF and mode of payment please refer to the paragraph titled “Acceptance of the Issue” and “Payment Method” beginning on page no. 75 and 71 respectively of this Letter of Offer. Option B: Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). The application for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board and in consultation if necessary with the Designated Stock Exchange. This allotment of additional Equity Shares will be made on an equitable basis with reference to number of Equity Shares held by you on the Record Date. If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be in the manner prescribed under the paragraph titled “Basis of Allotment” beginning on page no. 92 of this Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favour may not apply for additional Equity Shares.


77

Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose. Option C & D: Renunciation This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person or persons subject to the approval of the Board. Such renouncees can only be Indian Nationals (including minor through their natural / legal guardian) / limited companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust / society is authorized under its constitution / bye laws to hold Equity Shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board. Renunciation in favour of non residents / FIIs Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval(s), wherever the same are liable to be rejected. By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, OCBs have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to OCBs Regulations), 2003. Accordingly, the existing Equity shareholders of our Company who wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s) except with the prior permission of RBI. Your attention is drawn to the fact that our Company shall not allot and / or register any Equity Shares in favour of:

1. More than three persons including joint holders; 2. Partnership firm(s) or their nominee(s); 3. Minors (unless application is made through a guardian) ;and 4. Any Trust or Society (unless the same is registered under the Societies Registration

Act, 1860 or any other applicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company).

The right of renunciation is subject to the express condition that the Board / Committee of Directors shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof. Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Bankers to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filled in shall be conclusive


78

evidence for our Company of the person(s) applying for Equity Shares in Part C to receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may not apply for additional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will also have no further right to renounce any shares in favour of any other person. Procedure for renunciation To renounce all the Equity Shares offered to a shareholder in favour of one renouncee If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF. Renouncee(s) shall not be entitled to further renounce their entitlement in favour of any other person. To renounce in part/or renounce the whole to more than one person(s) If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. For this purpose you shall have to apply to the Registrar to the Issue. Please indicate your requirement of Split Application Forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for Split Application Forms. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed. In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with our Company, the application is liable to be rejected. Renouncee(s) The person(s) in whose favour the offer is renounced should fill in and sign Part C of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with the application money. Option E: Change and / or introduction of additional holders If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is /are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed. However, this right of renunciation is subject to the express condition that the Board shall be entitled in its absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason thereof. Please note that: 1. Part A of the CAF must not be used by any person(s) other than those in whose favour this

Issue has been made. If used, this will render the application invalid.

2. Request for split application form should be made for a minimum of one (1) Equity Share or in multiples of one (1) Equity Share;

3. Request by the applicant for the Split Application Form should reach our Company on or before July 06, 2011.


79

4. Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.

5. Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number / DP and Client ID number and his / her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received / found subsequently. Thus in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of duplicate CAF in transit, if any. Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process: Investors may apply through the ASBA process. ASBA can be availed by all the investors except anchor investors. Non-retail investors have to compulsorily apply through ASBA. The investor is required to fill the ASBA form and submit the same to their bank or to the syndicate members. The SCSB will block the amount in the account as per the authority contained in ASBA form. On allotment, amount will be unblocked and account will be debited only to the extent required to be paid for allotment of shares. Hence, there will be no need of refunds This section is for the information of the Equity Shareholders proposing to subscribe to the Issue through the ASBA Process. Our company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and to ensure that the CAF is correctly filled up. . Please note that pursuant to the SEBI circular dated April 29, 2011, all applicants who are QIBs or are applying in this Issue for Equity Shares for an amount exceeding ` 200,000, shall mandatorily make use of ASBA facility The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Shareholder(s) of our company on the Record Date and who:

Is holding the Equity Shares in dematerialised form and has applied towards his/her rights entitlements or additional Securities in the Issue in dematerialised form;

Has not renounced his entitlements in full or in part; Is not a Renouncee; Is applying through a bank account with one of the SCSBs.

CAF The Registrar will despatch the CAF to all Equity Shareholders as per their entitlement on the Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA


80

payment mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. Acceptance of the Issue You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of our company in this regard. Mode of payment The Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar’s instruction allocable to the Equity Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI Regulations, into the separate bank account maintained by our company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount remaining after the finalization of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Manager to the respective SCSB. The Equity Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, our company would have a right to reject the application only on technical grounds. Options available to the Equity Shareholders applying under the ASBA Process The summary of options available to the Equity Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares, using the respective CAFs received from Registrar:

Option Available Action Required 1 Accept whole or part of your entitlement

without renouncing the balance. Fill in and sign Part A of the CAF (All joint holders must sign)

2 Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The Equity Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases


81

where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA process option. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are entitled too, provided that (i) you have applied for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Basis of Allotment” on page no. 92 of this Letter of Offer. If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for additional Securities in Part A of the CAF. Renunciation under the ASBA Process Renouncees cannot participate in the ASBA Process. Option to receive Securities in Dematerialized Form EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE. General instructions for Equity Shareholders applying under the ASBA Process

i. Please read the instructions printed on the respective CAF carefully.

ii. Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected. The CAF must be filled in English.

iii. The CAF in the ASBA Process should be submitted at a Designated Branch of the

SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to our company or Registrar or Lead Manager to the Issue.

iv. All applicants, and in the case of application in joint names, each of the joint

applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected.

v. All payments will be made by blocking the amount in the bank account maintained

with the SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

vi. Signatures should be either in English or Hindi or in any other language specified in the

Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with our company/or Depositories.


82

vii. In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with our company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

viii. All communication in connection with application for the Securities, including any

change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole applicant Equity Shareholder, folio numbers and CAF number.

ix. Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process.

Do’s:

a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.

b. Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you.

c. Ensure that the details about your Depository Participant and beneficiary account are

correct and the beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.

d. Ensure that the CAFs are submitted at the SCSBs whose details of bank account have

been provided in the CAF. e. Ensure that you have mentioned the correct bank account number in the CAF. f. Ensure that there are sufficient funds (equal to {number of Equity Shares as the case

may be applied for} X {Application Money payable, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.

g. Ensure that you have authorised the SCSB for blocking funds equivalent to the total

amount payable on application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

h. Ensure that you receive an acknowledgement from the SCSB for your submission of

the CAF in physical form. i. Each applicant should mention their PAN allotted under the I. T. Act. j. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which

the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF.

k. Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts:

1) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.


83

2) Do not pay the amount payable on application in cash, by money order or by postal

order. 3) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting

Banks (assuming that such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

4) Do not submit the GIR number instead of the PAN as the application is liable to be

rejected on this ground. 5) Do not instruct your respective banks to release the funds blocked under the ASBA

Process.

Grounds for Technical Rejection under the ASBA Process In addition to the grounds listed under “Grounds for Technical Rejection” on page no. 89 of this Letter of Offer, applications under the ABSA Process are liable to be rejected on the following grounds: a) Application for entitlements or additional shares in physical form. b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records

available with the Registrar. c) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such

Collecting Bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.

d) Renouncee applying under the ASBA Process. e) Insufficient funds are available with the SCSB for blocking the amount. f) Funds in the bank account with the SCSB whose details are mentioned in the CAF having

been frozen pursuant to regulatory orders.

g) Account holder not signing the CAF or declaration mentioned therein. Depository account and bank details for Equity Shareholders applying under the ASBA Process IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. ORDINARY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF. Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to


84

the Issue will obtain from the Depository demographic details of these Equity Shareholders such as address, bank account details for printing on refund orders and occupation (“Demographic Details”). Hence, Equity Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF. These Demographic Details would be used for all correspondence with such Equity Shareholders including mailing of the letters intimating unblock of bank account of the respective Equity Shareholder. The Demographic Details given by Equity Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs, the Equity Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Letters intimating allotment and unblocking (if any) would be mailed at the address of the Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account. Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process and none of our company, the SCSBs or the Lead Managers shall be liable to compensate the Equity Shareholder applying under the ASBA Process for any losses caused to such Ordinary Shareholder due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Equity Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is not applying under the ASBA Process may make an application to subscribe to the Issue on plain paper, along with Demand Draft, net of bank and postal charges payable at Delhi which should be drawn in favour of the “BAMPSL Securities Ltd– Rights Issue “R” and the Equity Shareholders should send the same by registered post directly to SCSB. The envelope should be superscripted “BAMPSL Securities Ltd – Rights Issue “R” and should be postmarked in India. The application on plain paper, duly signed by the Investors including joint holders, in the same order as per specimen recorded with our company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

Name of Issuer, being BAMPSL Securities Limited; Name and address of the Equity Shareholder including joint holders; Registered Folio Number/ DP and Client ID no.; Number of Equity Shares held as on Record Date; Number of Equity Shares entitled to; Number of Equity Shares applied for; Number of additional Equity Shares applied for, if any; Total number of Equity Shares applied for; Total amount paid on application at the rate of Re. 1.00 per Equity Share;


85

Particulars of cheque/draft; Except for applications on behalf of the Central or State Government and the officials

appointed by the courts, PAN of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue; and

Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of our company.

If any shareholder makes an application on application form as well as on plain paper, both his applications shall be liable to be rejected at the option of the issuer.

Underwriting The Issue is not underwritten. Allotment / Refund Our company will issue and dispatch allotment advice/ share certificates /demat credit and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our company becomes liable to repay it, our company and every Director of our company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under Section 73 of the Companies Act. Investors residing at centres where clearing houses are managed by the RBI or are available otherwise, will get refund through ECS only except where the Investors are otherwise disclosed as applicable/eligible to get refunds through direct credit and RTGS. In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form by using electronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be given separately. Investors to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit refund with a period of 15 days from the Issue Closing Date. In case of those Investors who have opted to receive their Rights Entitlement in physical form, our company will issue the corresponding share certificates under section 113 of the Companies Act or other applicable provisions if any. Any refund order exceeding ` 1,500 will be dispatched by registered post/ speed post to the sole/ first Investor’s registered address. Refund orders up to the value of ` 1,500 would be sent under the certificate of posting. Such cheques or pay orders will be payable at par at all places where the applications were originally accepted and will be marked ‘Account Payee only’ and would be drawn in the name of the sole/ first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose. Payment of Refund Mode of making refunds The payment of refund, if any, would be done through any of the following modes:

1. ECS – Payment of refund would be done through ECS for Investors having an account at any centre where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for Investors having a bank account at any centre where ECS facility has been made available by the RBI or are available otherwise (subject to availability of all information for crediting the refund through ECS), except where the Investor, being eligible, opts to receive refund through National Electronic Fund Transfer (“NEFT”), direct credit or RTGS.


86

2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors’ bank has been assigned the Indian Financial System Code, which can be linked to a MICR, if any, available to that particular bank branch. IFSC will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the Investors have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC of that particular bank branch and the payment of refund will be made to the Investors through this method.

3. Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be

eligible to receive refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by our company.

4. RTGS – Investors having a bank account at any centre where such facility has been

made available and whose refund amount exceeds ` 10 lacs, have the option to receive refund through RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the refund bank(s) for the same would be borne by our company. Charges, if any, levied by the Investor’s bank receiving the credit would be borne by the Investor.

5. For all other Investors, including those who have not updated their bank particulars

with the MICR code, the refund orders will be despatched under certificate of posting for value up to ` 1,500 and through Speed Post/ Registered Post for refund orders of ` 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and payable at par.

6. Credit of refunds to Investors in any other electronic manner, permissible under the

banking laws, which are in force, and are permitted by the SEBI from time to time. Printing of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the Investor’s bank account, where available, are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. Our Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Allotment advice / Share Certificates/ Demat Credit Allotment advice/ share certificates/ demat credit or letters of regret will be dispatched to the registered address of the first named Investor or respective beneficiary accounts will be credited within 15 days from the Issue Closing Date. In case our company issues allotment advice, the relevant share certificates will be dispatched within one month from the date of allotment. Allottees are requested to preserve such allotment advice (if any) to be exchanged later for share certificates. Investors may please note that the Equity Shares of our Company can be traded on the Stock Exchanges only in dematerialized form. Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under: • Open a beneficiary account with any depository participant (care should be taken that the

beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of our company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with our company). In case of Investors having various folios in our Company with different joint holders, the Investors


87

will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account(s) need not adhere to this step.

• For Equity Shareholders already holding Equity Shares of our Company in dematerialized

form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of our company.

Responsibility for correctness of information (including Investor’s age and other details) filled in the CAF vis-à-vis such information with the Investor’s depository participant, would rest with the Investor. Investors should ensure that the names of the Investors and the order in which they appear in CAF should be the same as registered with the Investor’s depository participant. If incomplete / incorrect beneficiary account details are given in the CAF the Investor will get Equity Shares in physical form. The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of Equity Shares in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.

General instructions for Investors

a) Please read the instructions printed on the enclosed CAF carefully.

b) Application should be made on the printed CAF provided by our Company and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the Investors, details of occupation, address, father’s / husband’s name must be filled in block letters. The CAF together with cheque/demand draft should be sent to the Bankers to the Issue/Collecting Bank or, in case of applications made on plain paper, to the Registrar to the Issue and not to our Company or Lead Manager to the Issue. Investors residing at places other than cities where the branches of the Bankers to the Issue have been authorised by our Company for collecting applications, will have to make payment by demand draft payable at Delhi of an amount net of bank and postal charges and send their CAFs to the Registrar to the Issue by registered post. If any portion of the CAF is/are detached or separated, such application is liable to be rejected. Applications where separate cheques/demand drafts are not attached for amounts to be paid for Equity Shares are liable to be rejected.

c) Except for applications on behalf of the Central or State Government and the officials appointed by the courts, PAN of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue. CAFs without PAN will be considered incomplete and are liable to be rejected.


88

d) Investors are advised that it is mandatory to provide information as to their

savings/current account number and the name of our Bank with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected.

e) The payment against the application should not be effected in cash if the amount to be paid is ` 20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with our company.

g) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above referred documents are already registered with our company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

h) In case of joint holders, all joint holders must sign the relevant part of the CAF in the

same order and as per the specimen signature(s) recorded with our company. Further, in case of joint Investors who are Renouncees, the number of Investors should not exceed three. In case of joint Investors, reference, if any, will be made in the first Investor’s name and all communication will be addressed to the first Investor.

i) All communication in connection with application for the Equity Shares, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole Investor, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the Registrar and Transfer Agents of our company, in the case of Equity Shares held in physical form and to the respective depository participant, in case of Equity Shares held in dematerialized form.

j) SAFs cannot be re-split.

k) Only the person or persons to whom Equity Shares have been offered and not Renouncee(s) shall be entitled to obtain SAFs.

l) Investors must write their CAF number at the back of the cheque /demand draft.

m) Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.


89

n) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts

or post-dated cheques and postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (e) above).

o) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

ASBA Process Please note that pursuant to the SEBI circular dated April 29, 2011, all applicants who are QIBs or are applying in this Issue for Equity Shares for an amount exceeding ` 200,000, shall mandatorily make use of ASBA facility. An Equity Shareholder holding the Equity Shares in dematerialized form as on the Record Date may participate in this Issue through the ASBA process by indicating in Part A of the CAF or in a plain paper application, as to whether such Equity Shareholder desires to avail the ASBA option. The CAF or the plain paper application shall be required to be submitted to the SCSB with whom the bank account of the ASBA Investor or bank account utilised by the ASBA Investor (“ASBA Account”) is maintained. The SCSB shall block an amount equal to the Issue Price in the ASBA Account specified in the CAF (Part A thereof), or the plain paper application, as the case may be, on the basis of an authorisation to this effect given by the account holder at the time of submitting the said CAF or the plain paper application. The ASBA data shall thereafter be uploaded by the SCSB in the electronic system of the Stock Exchanges. The Issue Price shall remain blocked in the aforesaid ASBA Account until finalisation of the ‘Basis of Allotment’ and consequent transfer of the Issue Price against the allocated Equity Shares to the designated account, or until withdrawal/failure of this Issue or until withdrawal/rejection of the ASBA, as the case may be. Once the ‘Basis of Allotment’ is finalized, the Registrar to the Issue shall send an appropriate request to the controlling branch of the SCSB for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Investor to the designated account. In case of withdrawal/failure of this Issue, the blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue.

Grounds for Technical Rejections Investors are advised to note that applications are liable to be rejected on technical grounds, including the following:

• Amount paid does not tally with the amount payable for; • Bank account details (for refund) are not given; • Age of Renouncee(s) not given; • Except for CAFs on behalf of the Central or State Government and the officials

appointed by the courts, PAN not given for application of any value; • In case of CAF under power of attorney or by limited companies, corporate, trust, etc.,

relevant documents are not submitted; • If the signature of the Equity Shareholder does not match with the one given on the

CAF; • If the Investors desires to have Equity Shares in electronic form, but the CAF does not

have the Investor’s depository account details; • CAFs are not submitted by the Investors within the time prescribed as per the CAF and

this Letter of Offer; • CAFs not duly signed by the sole/joint Investors; • CAFs by OCBs; • CAFs accompanied by Stockinvest; • In case no corresponding record is available with the depositories that matches three

parameters, namely, names of the Investors (including the order of names of joint holders), the Depository Participant’s identity (DP ID) and the beneficiary’s identity;


90

• CAFs by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided;

• CAFs where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements;

• Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground;

• Applications by renouncees who are persons not competent to contract under the Indian Contract Act, 1872, including minors;

• Multiple CAFs; and • Please read the Letter of Offer and the instructions contained therein and in the CAF

carefully before filling in the CAF. The instructions contained in the CAF are each an integral part of the Letter of Offer and must be carefully followed. CAF is liable to be rejected for any non-compliance of the provisions contained in the Letter of Offer or the CAF.

Mode of payment for Resident Equity Shareholders/ Investors

• All cheques / drafts accompanying the CAF should be drawn in favour of the Collecting Bank (specified on the reverse of the CAF), crossed ‘A/c Payee only’ and marked ‘BAMPSL Securities Ltd - Rights Issue “R”;

• Investors residing at places other than places where the bank collection centres have been opened by our Company for collecting applications, are requested to send their CAFs together with demand draft for the full application amount, net of bank and postal charges favouring the Bankers to the Issue, crossed ‘A/c Payee only’ and marked ‘BAMPSL Securities Ltd - Rights Issue “R” payable at Delhi directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Investment by NRIs Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3) (i) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. NRI Investors should note that applications by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided are liable to be rejected. Mode of payment for Non-Resident Equity Shareholders/ Investors As regards the application by non-resident Equity Shareholders, the following conditions shall apply: Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable laws and such permissions should be attached to the CAF. Individual non-resident Indian applicants can obtain application form at the following address: Registrars to the Issue Name Alankit Assignments Limited SEBI Registration No. INR 000002532 Address 2E/21, Jhandewalan Extension, New Delhi–110055. Telephone No +91-11- 42541234, 23541234 Fax No +91-11- 4254 1967


91

E mail: [email protected] Website www.alankit.com Contact Person Mr. J.K.Singla Applications not accompanied by the aforesaid approval(s), wherever the same are required, are liable to be rejected. Payment by non-residents must be made by demand draft payable at Delhi /cheque payable drawn on a bank account maintained at Delhi or funds remitted from abroad in any of the following ways: As regards the application by non-resident Equity Shareholders, the following conditions shall apply: • Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or

from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable laws and such permissions should be attached to the CAF.

• Applications not accompanied by the aforesaid approval(s), wherever required, shall be liable to be rejected.

• Payment by non-residents must be made by demand draft payable at Delhi /cheque payable drawn on a bank account maintained at Delhi or funds remitted from abroad in any of the following ways:

Application with repatriation benefits • By Indian Rupee drafts purchased from abroad and payable at Delhi or funds remitted from

abroad (submitted along with Foreign Inward Remittance Certificate); or • By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account maintained

in Delhi; or • By Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in India

and payable in Delhi; or FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

• Non-resident investors applying with repatriation benefits should draw cheques/drafts in favour of ‘BAMPSL Securities Ltd – Rights Issue – “NR” and must be crossed ‘account payee only’ for the full application amount, net of bank and postal charges.

Application without repatriation benefits • As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in

addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Delhi or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Delhi. In such cases, the allotment of Equity Shares will be on non-repatriation basis.

• All cheques/drafts submitted by non-residents applying on a non-repatriation basis should be drawn in favour of ‘BAMPSL Securities Ltd – Rights Issue – “NR” and must be crossed ‘account payee only’ for the full application amount, net of bank and postal charges. The CAFs duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

• Investors may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and is liable to be rejected.


92

• New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.

Notes: • In case where repatriation benefit is available, interest, dividend, sales proceeds derived

from the investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to IT Act.

• In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be remitted outside India.

• The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

• In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Basis of Allotment The basis of allotment shall be finalized by the Board of our Company or Committee of Directors of our Company authorized in this behalf by the Board of our company. The Board of our Company or the Committee of Directors as the case may be, will proceed to allot the equity Share in consultation with BSE in the following order of priority.

a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favor, in full or in part.

b) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after making full allotment in (a) above. The allotment of such Equity Shares will be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

c) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplus available after making full allotment under (a), (b) and (c) above.

d) Our Company shall not retain any over-subscription. Payment by Stockinvest In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in this Issue. Disposal of application and application money No acknowledgment will be issued for the application moneys received by our company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto.


93

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the Investor within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes liable to repay it, our Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under Section 73 of the Companies Act. For further instruction, please read the CAF carefully. Undertakings by our company

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock exchanges where the specific securities are to be listed will be taken within seven working days of finalization of basis of allotment.

3. That funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be made available to the Registrar to the Issue by our company.

4. That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 15 days of closure of the Issue, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

5. That no further issue of securities shall be made till the securities offered through this offer document are listed or till the application moneys are refunded on account of non-listing, under subscription, etc.;

6. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to non-ASBA applications while finalising the Basis of Allotment.

Utilisation of Issue Proceeds The Board of Directors declares that: i. All monies received out of this Issue shall be transferred to a separate bank account other

than the bank account referred to sub-section (3) of Section 73 of the Companies Act;

ii. details of all monies utilised out of the issue referred above shall be disclosed under an appropriate separate head in the balance sheet of the issuer indicating the purpose for which such monies had been utilised; and

iii. Details of all unutilized monies out of the Issue, if any, shall be disclosed under an

appropriate separate head in the balance sheet of our Company indicating the form in which such unutilized monies have been invested.

Minimum Subscription

If our Company does not receive the minimum subscription of ninety per cent of the Issue through this letter of offer on the date of the closure of the Issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the Issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. 15 days after closure of the Issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of section 73 of the Companies Act. In case the permission to deal in and for an official quotation of the Equity Shares is not granted by BSE, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of this Letter of Offer and if such money is not repaid within


94

eight days after the day from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under sub-section (2) and (2A) of section 73 of the Companies Act, 1956.

Important 1. Please read this Letter of Offer carefully before taking any action. The instructions

contained in the accompanying Composite Application Form (CAF) are an integral part of the conditions of this Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

2. All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscripted ‘BAMPSL Securities Limited - Rights Issue’ on the envelope) to the Registrar to the Issue at the following address:

Alankit Assignments Limited 2E/21, Jhandewalan Extension, New Delhi–110055. Tel.: +91-11- 4254 1234, 2354 1234 ; Fax No.: +91-11- 4254 1967 Email: [email protected]. Website : www.alankit.com. Contact Person: Mr. J .K.Singla

3. It is to be specifically noted that this Issue of Equity Shares is subject to the chapter titled “Risk Factors” beginning on page no. 7 of this Letter of Offer

4. Our Company will not be liable for any postal delays and applications received through mail after the closure of the Issue, are liable to be rejected and returned to the applicants.

5. The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of GoI and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investment. By way of Circular No. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the equity shares to be issued is not less than the price at which the equity shares are issued to residents. Transfers of equity shares previously required the prior approval of the FIPB. However, vide a RBI circular dated October 4, 2004 issued by the RBI, the transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that

i. the activities of the investee company are under the automatic route under the foreign direct investment (FDI) Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

ii. the non-resident shareholding is within the sectoral limits under the FDI policy, and

iii. the pricing is in accordance with the guidelines prescribed by the SEBI/RBI. As per the existing policy of the Government of India, OCBs cannot participate in this Issue.


95

SECTION IX –STATUTORY AND OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following Contracts (not being contracts entered in to in the ordinary course of business carried on by our Company or entered into more than two years before the date of this Letter of Offer) which are or may be deemed material have been entered or are to be entered in to by our Company. These Contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company situated at 100-A, Cycle Market, Jhandewalan Extension, New Delhi – 110 055 from 10.00 a.m. to 1.00 p.m., from the date of this Letter of Offer until the issue closing date. A) MATERIAL CONTRACTS

1. Engagement Letter dated May 14, 2010 appointing Arihant Capital Markets Limited to act as Lead Managers to the Issue.

2. Agreement dated August 05, 2010 entered into with the Lead Managers to the Issue.

3. Memorandum of Understanding dated July 26, 2010 entered into with the Registrars to the Issue.

B) DOCUMENTS

1. Memorandum and Articles of Association of our company.

2. Certificate of Incorporation of our company dated February 3, 1995.

3. Copy of the resolution passed at the meeting of the Board of Directors held on March 02, 2010 April 16, 2010 approving this Issue.

4. Prospectus of our company in relation to its IPO made in 1996.

5. Copy of the Resolution passed at the Board Meeting held on 30-01-2009 reappointing Mr. Bhisham Kumar Gupta as Managing Director for a period of 5 year with effect from 06-02-2009.

6. Annual Report of our company for the last five financial years upto FY 2010.

7. Copy of the Due Diligence Certificate dated August 06, 2010 from Arihant Capital Markets Limited

8. Consents of the Directors, Company Secretary, Auditors, Lead Manager to the Issue, Bankers to the Issue and Registrars to the Issue, to include their names in the Letter of Offer to act in their respective capacities.

9. Letter dated February 5, 2011 from the Auditors of our company confirming Tax Benefits as mentioned in this Letter of Offer.

10. The Report of the Auditors, G.C. Agarwal & Associates. as set out herein dated February 5, 2011

11. Letter dated September 3, 2010 issued by BSE giving their in-principle approval for listing of the shares arising from this Issue.

12. Letter No. DIL/BAMPSL/2707/2011, dated January 21, 2011, issued by the Securities and Exchange Board of India for the Issue.

13. Tripartite Agreement dated September 6, 1999 between BAMPSL SECURITIES LTD, Alankit Assignment Limited & NSDL for offering depository option to the investors.

14. Tripartite Agreement dated March 21, 2000 between BAMPSL SECURITIES LTD, Alankit Assignment Ltd & CDSL for offering depository option to the investors.

bampsl securities limited · the companies act, 1956 or any statutory modifications or re-enactment...

Documents